Wylfa Newydd Nuclear Power Station Energy Infrastructure Project
Kwasi Kwarteng Excerpts(4 years, 2 months ago)
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The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
This statement concerns an application made by Horizon Nuclear Power Limited under the Planning Act 2008 for development consent for the construction and operation of a new nuclear power station and associated infrastructure at Wylfa Head on the Isle of Anglesey.
Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of receipt of the examining authority’s report unless exercising the power under section 107(3) to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it. The deadline for the decision on the proposed Wylfa Newydd (Nuclear Generating Station) Order application was 23 October 2019, but that deadline was reset to 31 March 2020 to allow further information in respect of environmental effects and other outstanding issues to be provided and considered.
Following initial analysis of the further information which has now been provided, the Secretary of State has concluded that an additional period of time is required in order to complete his consideration in respect of environmental effects and other issues which were outstanding following the examination. It is not anticipated that any further information will be required.
The Secretary of State has set a new deadline for deciding the application of 30 September 2020. The decision to set the new deadline for the application is without prejudice to the Secretary of State’s decision on whether to grant or refuse development consent.
[HCWS430]
Oral Answers to Questions
Kwasi Kwarteng Excerpts(4 years, 4 months ago)
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Tonia Antoniazzi (Gower) (Lab)
The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
The Prime Minister has made clear our intention to build back greener. We are taking action to deliver on that commitment, including through a commitment of over £3 billion to reduce emissions from our buildings across the UK, £800 million to promote carbon capture from power stations and industry, and a further £100 million being invested in R&D in direct air capture technologies.
Tom Randall
I am delighted that the Chancellor focused on creating green jobs in his summer economic update. Does my right hon. Friend agree that launching a multi-billion pound drive to improve the energy efficiency of homes will not only be good for creating jobs and driving us towards our net zero target but will save people money on their energy bills?
Kwasi Kwarteng
My hon. Friend is exactly right. Our £3 billion investment in energy efficiency could support up to 140,000 green jobs. The £2 billion green homes grant will upgrade over 600,000 homes, saving households up to £600 a year on their energy bills.
Janet Daby [V]
I agree that it is great to have jobs created. Insulating homes creates jobs across all regions of the UK, yet right now it is having the opposite effect. Labour has been contacted by insulation businesses who are experiencing cancelled work as clients now want to wait until September, when green homes grant money is available. Will the Minister fix this problem, and fix it now, by stating that jobs done in July and August can claim green homes grant funding in September?
Kwasi Kwarteng
The hon. Lady asks a very pertinent question. The Chancellor set out a £3 billion programme, and of course it will take time before that money is fully deployed. As well as the green homes upgrade, we have committed £320 million to the heat networks investment project, which is very relevant to the kind of work that she has described.
Rachael Maskell [V]
With the Government having committed to invest in the bioscience sector in York, making it the heart of the green new deal, they are now trying to make that conditional on a local government reorganisation that is not only deeply unpopular but is also, frankly, unworkable. In the light of comments that York’s economy will be the second-worst hit in the country, with unemployment rising to as high as 28%, will the Minister instead now bring forward that investment, to prevent mass unemployment in my city, to prevent unnecessary economic pain and to kick-start investment in green-collar jobs?
Kwasi Kwarteng
As the hon. Lady knows, we are absolutely committed to creating green-collar jobs. Today, we have 460,000 of those jobs across the UK; by 2030, we have stated our commitment to have 2 million such jobs. No one can deny our commitment to creating green jobs. I would further add that we are also committed to making the UK a science superpower, and we will make innovation central to our green recovery. That is absolutely front and centre of what the Government are trying to do.
Tonia Antoniazzi
Commenting on his own report back in 2017, Charles Hendry said,
“the evidence is clear that tidal lagoons can play a cost effective role in the UK’s energy mix”.
This Government still have not managed to back the oven-ready pathfinder tidal energy project in Swansea bay. When will they recognise the opportunities, the new green jobs and the inward investment support that tidal power can bring to Swansea, Wales and the rest of the UK?
Kwasi Kwarteng
We are absolutely committed, as the hon. Lady knows, to tidal power and all forms of marine power. There was a specific issue with the Swansea bay tidal lagoon project, which was that it was felt not to be economical. That was a specific, project-based, single incidence where we did not feel that it was value for taxpayers’ money.
Dr Alan Whitehead (Southampton, Test) (Lab)
All we have right now, as far as energy efficiency for homes is concerned, is an announcement of a one-year scheme to provide vouchers for energy efficiency improvements in mostly lower priority properties, with no detail yet as to how that will work. The Minister simply did not answer the question from my hon. Friend the Member for Lewisham East (Janet Daby) about businesses in the field who are telling us that jobs are being lost now, because people are cancelling work in anticipation of those details, if and when they come out.
What we need for green recovery is a long-term programme that develops jobs and skills and really contributes towards low carbon energy efficiency improvements across all homes in England and Wales. When does the Minister intend to provide details of how the short-term plan will work and what is he doing to establish a proper long-term home energy efficiency programme on the back of that plan?
Kwasi Kwarteng
Obviously, the hon. Gentleman and I will have slightly different views of what the Government are doing. I was surprised to hear him dismiss the £3 billion commitment. I remind him that green homes grants will deliver improvements to more than 650,000 homes, supporting 140,000 jobs in 2020-21. These are significant strides and a huge amount of money has been committed to that programme.
Geraint Davies (Swansea West) (Lab/Co-op)
The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
The Government have provided clear advice on ventilation in our safer workplaces guide. We are led by the science in that work and, as the scientific and medical advice changes, the guidance will be updated to reflect that.
Geraint Davies [V]
The Minister should know that the science now shows that indoor air pollution dramatically increases coronavirus infection and death rates, and that masks inhibit the transmission of the virus. Will he today press to follow France’s lead to make compulsory mask-wearing the law in all indoor environments accessible by the public, and include indoor air pollution in the terms of the Environment Bill in September, in order to save lives and protect our NHS?
Kwasi Kwarteng
As I said in my earlier answer, we are guided all the time by science and evidence and, as the science and evidence changes, we will calibrate our policy responses to that effect.
Michael Fabricant (Lichfield) (Con)
Paul Howell (Sedgefield) (Con)
The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
I am delighted to assure my hon. Friend that the Government are, as he knows, determined to ensure the rapid expansion of the offshore wind manufacturing supply chain. We have committed to 40 GW of offshore wind by 2030, and I fully agree with him that the north-east region is critical to that development. I know the project to which he is referring, and officials and myself are looking closely at its viability.
Andy McDonald (Middlesbrough) (Lab)
The non-payment of the national minimum wage in Leicester garment factories was shocking, but unfortunately unsurprising. Exploitation in the garment industry has been extensively reported for years, including in a 2019 Environmental Audit Committee report. The cases we know about are likely to be the tip of the iceberg. Given that these abusive working practices are not only criminal, but a threat to public health, will the Secretary of State tell the House what steps he has taken to escalate enforcement in light of the covid-19 pandemic?
Kwasi Kwarteng
As my hon. Friend will know, in June 2020 we announced a support package to enable universities to continue their vital research. Universities will be required to use some of that funding for research normally funded by medical research charities. We are continuing to look at this situation and we hope to engage closely with charities to develop an even more robust package.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP) [V]
Kwasi Kwarteng
The hon. Lady raises an interesting point, and I or one of my fellow Ministers would be happy to meet her to discuss it further.
Dame Cheryl Gillan (Chesham and Amersham) (Con) [V]
Kwasi Kwarteng
I am delighted to join my right hon. Friend the Secretary of State in commending Tom Hunt and Baggy for their pioneering work. She knows that tackling carbon emissions and improving air quality go hand in hand. We are taking action to address both, particularly with the 300,000 ultra low emission vehicles registered in the UK, and we are also providing new funding for vehicle charging infrastructure.
Chris Bryant (Rhondda) (Lab)
Kwasi Kwarteng
The hon. Gentleman is absolutely right to highlight this issue and I share a lot of his concerns, but it is wrong to suggest that we are not doing anything. From autumn this year, we are providing a package of low-interest loans with long payback periods, supplemented by a small element of grant, to cover up to 80% of the universities’ income losses from international students. The money that is being pumped into our further education deals precisely with the point that he raised, and we are continuing to do that.
Sir Desmond Swayne (New Forest West) (Con)
Kwasi Kwarteng
My right hon. Friend raises an important point. Of course we recognise the valiant contribution that the sector makes to the UK economy. We are working closely with the sector to pilot the reopening of conference centres, with a view to full socially distanced reopening from 1 October, subject of course to continuing to make progress.
Jessica Morden (Newport East) (Lab)
Scott Benton (Blackpool South) (Con)
Kwasi Kwarteng
I thank my hon. Friend for that question, because it goes to the heart of what we are doing as a Government. We already have more than 460,000 UK jobs in low-carbon businesses and their supply chains. Those are green-collar jobs and our research and development is totally committed to expanding those opportunities, whereby we want to reach 2 million green jobs by 2030. It is my conviction that coastal communities such as the one he represents will fully benefit and be in a place where they can reap the rewards of our investment in the green economy.
Christian Matheson (City of Chester) (Lab)
Kwasi Kwarteng
The hon. Gentleman is right to highlight the key importance of the aviation sector, and the Government are supporting aerospace and its aviation customers with more than £8.5 billion, as part of our measures to support the overall economy. I understand that Airbus has drawn down £500 million on the corporate finance facility, and of course the Secretary of State and the ministerial team are happy to engage with him and his constituents on this important matter.
Selaine Saxby (North Devon) (Con)
Offshore Wind Projects
Kwasi Kwarteng Excerpts(4 years, 4 months ago)
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The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
This statement concerns the application made by Orsted Hornsea Project Three (UK) Ltd for development consent for the installation, operation and maintenance of the proposed Hornsea Project Three offshore wind farm, its related offshore infrastructure off the coast of Norfolk and its related onshore electrical connections within that county.
Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it. The statutory decision deadline for Hornsea Project Three offshore wind farm was reset previously to allow for further consideration of environmental issues. The latest deadline for the application was 1 July 2020.
On 1 July 2020, the Secretary of State issued a letter stating that he was minded to grant consent to the Hornsea Project Three offshore wind farm but that he required further information in respect of potential adverse environmental effects on the Flamborough and Filey coast special protection area. In order to provide Orsted Hornsea Project Three (UK) Ltd with sufficient time to provide that information and for other interested parties to comment, he has decided to set a new deadline of 31 December 2020.
The decision to set the new deadline for this application is without prejudice to the decisions on whether to grant or refuse development consents for them.
[HCWS414]
Energy Infrastructure Planning Projects
Kwasi Kwarteng Excerpts(4 years, 4 months ago)
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The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
This statement concerns an application made by Norfolk Boreas Ltd for development consent for the installation, operation and maintenance of the proposed Norfolk Boreas offshore wind farm, their related offshore infrastructure off the coast of Norfolk and their related onshore electrical connections within this county.
Under section 98(1) of the Planning Act 2008, the examining authority must complete its examination of an application by the end of the period of six months beginning with the day after the start day of the examination unless the Secretary of State sets a new deadline under section 98(4) of that Act. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it.
A request has been made by the Planning Inspectorate to extend the examination period—for five months—for the proposed Norfolk Boreas offshore wind farm development. The reasons given for this request were:
due to Government guidelines in relation to coronavirus (“covid-19”) several hearings needed to be cancelled, potentially resulting in interested parties not being given a fair opportunity to participate in the examination;
a number of interested parties no longer had the capacity to participate in the examination process as a result of covid-19 resource prioritisation.
Taking these reasons into account and, after careful consideration, the Secretary of State has decided to reset the statutory timescale for the examination as requested. This means that the examination period is now extended to 12 October 2020.
As a consequence, the date for receipt of the examining authority’s report to BEIS is extended to 12 January 2021 and the statutory deadline for the Secretary of State’s decision is extended to 12 April 2021.
However, mindful of the need to avoid unnecessary delays to the development consent process, the Secretary of State requests the examining authority to make best efforts to complete the examination process as soon as is reasonably practicable within the extended period. He has requested that a new timetable for the examination should be published which demonstrates the actions to be taken to complete the examination as quickly as possible in this period. He also expects the examination authority to provide his Department with regular updates on progress.
The decision to set the new deadlines for this application is without prejudice to the decision on whether to grant or refuse development consent.
[HCWS349]
Business, Energy and Industrial Strategy: Departmental Spending
Kwasi Kwarteng Excerpts(4 years, 4 months ago)
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The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
It is a pleasure to respond to this excellent debate, and I commend all hon. Members who have spoken for their thoughtful contributions. In particular, I thank the hon. Member for Bristol North West (Darren Jones) for opening the debate.
I will deal first with the series of questions posed by the hon. Member for Greenwich and Woolwich (Matthew Pennycook). His first question was about the energy White Paper, which we fully expect to be published this year. He will understand that after the new Government took office in July last year, we had the summer recess, followed by the Prorogation debate, debates about the election, then the general election, the Budget and then covid. There were substantial reasons—they are regrettable, I accept—why the White Paper was delayed. We fully expect it to be published this autumn.
The hon. Gentleman asked about the decarbonisation of heat. I refer him to the fact that we have a heat in buildings strategy, which will outline the policies clearly and simply. There is certainly a great deal of movement in that area.
The hon. Gentleman said that there are lofty ambitions for day-to-day spending, and suggested that our spending is perhaps more carbon-emitting than it should be. We have actually had great success on the carbon emissions front, particularly in electricity generation. He will know that in 2010, when I entered in the House—he entered in 2015—offshore wind seemed like a fantasy, but in 10 years we have massively ramped up capacity. People say flippantly, “Oh, well, the cost is £39.50 per MWh”—the hon. Member for Kilmarnock and Loudoun (Alan Brown) said that—but that did not just happen by accident. It was a serious attempt by a serious Government to construct an auction—a CfD round—and it managed to drive down costs. It was led by policy and evidence. It has been very successful and is admired throughout the world. That is an example of BEIS delivering substantial change and innovation on carbon emissions reduction and the climate change debate.
On the open-cast coal mine that the hon. Member for Greenwich and Woolwich mentioned, that was a difficult question that involved the local community and consideration of the amounts of coal and jobs. He will accept that, as far as the coal ambition is concerned, the initial date for removing coal entirely from the electricity generating network was 2025, but we will deliver it a year in advance. How often is a Government anywhere in the world able to say in a parliamentary assembly such as this, “We are going to do better than our target”? That is another area where he is on very shaky ground.
Jackie Doyle-Price
The fact of the matter is that there are industrial processes that still require coal for generation. Is it not better that we mine coal in this country, rather than ship it from Siberia and Australia?
Kwasi Kwarteng
That may well be the case, but I think taking coal off the electricity generating system—the power generation network—is historically one of the most significant things that this country has done. If we look back in our own lifetimes, we see that coal and industrial questions relating to it were a dominant part of industrial and political debate only 20, 30 or 40 years ago, but in 2024 we hope to remove coal entirely from electricity generation. That is a huge success. We typically do not get the credit we would like in this House, but that is a significant achievement.
I want to talk briefly about some of the broader questions relating to this debate. It would be invidious of me to single out individual speeches, as there were so many good ones, but there are one or two areas where I want to reconfirm Government policy and give a good account of what we have achieved.
Many of the speeches I heard as I sat on the Treasury Bench were understandably focused on the Government’s response to the covid-19 outbreak. At the start of the crisis, the Government made it perfectly clear that we would do whatever it took to support our businesses and economy, and we have substantially delivered on that. The hon. Member for Kilmarnock and Loudoun mentioned the £330 billion commitment from the Treasury and said that it is an example of failure because the amount of debt—the loans that we have given—is a fraction of that, but of course the £330 billion also includes the furlough scheme, which was not in the form of a loan. It was the Government intervening and paying wages. It was a huge intervention, and it had nothing to do with loans. I am sure the hon. Gentleman understands that. This has been a cross-Government effort, and we in the Department for Business, Energy and Industrial Strategy have played our part in delivering a range of Government-backed finance schemes.
Let me re-enumerate those schemes: the coronavirus business interruption loans scheme, the bounce back loans, the coronavirus large business interruption loan scheme, and the future fund, which is an equity-to-debt scheme. As of this week, £45 billion-worth of loans have been approved through those schemes, backed largely by Government guarantees.
Justin Madders
The Minister is listing a lot of things that have been done in the past. My constituents want to know what is going to happen next, particularly those in the aerospace sector who are losing their jobs now. They look at France and Germany, where they see support for that sector. Can we have sector-specific support, please?
Kwasi Kwarteng
The accusation from some quarters of the House was that the Government had not done enough, and it was very much necessary to state for the record what we actually had done, and that is what I will proceed to do.
In the last few minutes of my remarks, I turn my attention to what is at the centre of the Department and at the centre of its strategy: the net zero commitment. I think it was the hon. Member for Bristol North West who said that this cannot just be a stand-alone policy. It is not; it is at the heart and centre of Government strategy. I also reject those voices that say that somehow we are the laggards and the backward students. That is a completely wrong characterisation. I mentioned coal. Germany’s date to remove coal from its electricity power generation is 2038—a whole 14 years after this Government and this country will have left coal behind. We are leaders, not followers, in many of these respects. The Prime Minister outlined in his speech on 30 June that we intend to
“build back better, build back greener, build back faster”,
and that is exactly what we intend to do.
The Prime Minister has already spoken of our plans to run 4,000 new zero-carbon buses and the new plan for cycleways as part of the upgrades to transport infrastructure. Since the outbreak of covid-19 in this country, we have published the first stage of our transport decarbonisation plan. That plan provides a measure of certainty and a clear pathway to the future. We have announced a £2 billion package for cycling and to encourage people to walk, which is not only more energy efficient, but also tackles issues such as obesity and exercise. We can remobilise and decarbonise at the same time, and that is exactly what we intend to do.
The hon. Member for Nottingham East (Nadia Whittome) made a passionate set of speeches, and I agree with her to some degree—we can always do better and go faster—but I disagree with the idea that somehow we have simply idled our time away and done nothing.
Thank you, Madam Deputy Speaker, for your patience and for the very brisk way in which the debate has been handled. We have heard some excellent speeches. BEIS is now considering how best to support businesses. The green recovery is at the heart of what we want to do post covid, and we are exceptionally focused—more than any other Department—on delivering the strategic goal of net zero. In all this work, we will continue to listen to businesses, large and small. I particularly look forward to engaging in debate with Members of this House, as I have done in the past. We are also listening to business representative organisations. We are determined to get it right for individuals and businesses who need support, for our economy and for the future.
Draft Contracts for Difference (Electricity Supplier Obligations) (Amendment) (Coronavirus) Regulations 2020
Kwasi Kwarteng Excerpts(4 years, 4 months ago)
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The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
I beg to move,
That the Committee has considered the draft Contracts for Difference (Electricity Supplier Obligations) (Amendment) (Coronavirus) Regulations 2020.
It is a delight to open the debate under your chairmanship, Ms Nokes. I will try to explain clearly the rationale behind this draft instrument. The regulations aim to limit the negative short-term impact on electricity suppliers of an unexpected increase in the costs of the contracts for difference scheme, which members of the Committee will know is integral to offshore wind and electricity power generation.
The Low Carbon Contracts Company is a Government-owned, arm’s length company that manages CfDs. In simple terms, it gets money in from energy suppliers that is used to pay to manage contracts for difference auctions. It is, in effect, a levy on suppliers. The regulations aim to alleviate the burden on energy suppliers, who would be forced by the rules to pay the LCCC when there are fears about working capital. Because there has been a huge drop in energy demand, the LCCC would have needed to raise the levy to get enough funds from energy suppliers to pay the generators.
I took the view with officials that this is not the time to impose additional burdens on the working capital of energy suppliers. As a consequence, the Government have agreed to provide a loan of up to £100 million to the LCCC to allow it to continue to pay CfD generators this quarter without increasing the financial burdens on energy suppliers, who, as we know, are in a vulnerable state. The loan is governed by a separate agreement between the Department for Business, Energy and Industrial Strategy and the LCCC and is not covered by the regulations.
The regulations make four technical changes to the existing Contracts for Difference (Electricity Supplier Obligations) Regulations 2014 to, in effect, defer payment. There is no question but that these costs will have to be paid; we are simply deferring the obligation for this quarter.
In brief, the regulations first reduce each electricity supplier’s obligation, in a quarterly obligation period, by the amount of financial assistance provided by the Government to the LCCC—the £100 million loan I referred to. Secondly, they increase each supplier’s obligation four quarters later. The obligation is therefore reduced in this coming quarter, but it will go up correspondingly in four quarters’ time. Thirdly, the regulations enable the LCCC to take into account anticipated receipt or repayment of financial assistance provided by the Government when setting the obligation for one quarter.
Adam Afriyie (Windsor) (Con)
I very much welcome this measure, which is a reasonable step given the current circumstances. I want to ask the Minister this question now, to give him time to reflect. If, during this period in which electricity suppliers have extended terms, one of them was to go out of business, what clawback mechanisms might there?
Kwasi Kwarteng
That is slightly outside the scope, but I understand where my hon. Friend is coming from. There are a number of measures that we would go into: there is the SLR—the supplier of last resort—and there are measures for mutualisation of cost. I also remind him that this happens every summer, regardless of covid. It is a highly competitive space, and a number of energy suppliers come in and out of the market at will, so this is very much in the run of ordinary business. This measure is related to the specific challenge of covid and to deferring payments in the way that he described.
Finally, the regulations enable the LCCC to repay any financial assistance provided by the Government, using moneys collected from electricity suppliers after the reconciliation process following the relevant quarterly obligation period. In effect, all we are doing is delaying the payable period so that it does not force energy suppliers to go out of business in the way my hon. Friend suggested.
I must stress that this deferral will give suppliers more time to prepare for the increase in payments and provide greater confidence about the level of additional costs they will face in the second quarter of 2021. I must also stress that the Government are committed to upholding the self-financing nature of levies in the energy system. There was no question of our providing some sort of grant or subsidy to the LCCC. We fully expect that whatever moneys are deferred will be paid eventually to the LCCC and that it will be able to sustain its function regardless of Government intervention.
These legislative changes are technical in nature. They needed to be made ahead of the LCCC’s quarterly reconciliation process, which determines suppliers’ obligations for the current quarter. That is expected on 9 July, at the end of next week. Subject to the will of Parliament, this instrument will enter into force the day after it is made. I commend the regulations to the House.
Kwasi Kwarteng
I will deal with the three points made by the hon. Gentleman in reverse order. He will have noticed that the Treasury has made all sorts of interventions across the whole economy. That does not mean that the Treasury should sustain its intervention in every business that has been furloughed. Similarly, with the LCCC, I made the decision that these were exceptional circumstances that warranted an exceptional response. It is in that sense that the Treasury has intervened; there is no notion that this will be ongoing. I want to put his mind to rest about that. Secondly, that is a loan—essentially, a working capital facility of £100 million that we expect to be repaid
On the hon. Gentleman’s second point about Ofgem and the price cap, that is something to which I am not privy. Ofgem will have a discussion about the price cap; it knows the circumstances of the energy suppliers and about the legislation. I have had weekly rounds with the sectors and the energy suppliers, and twice-weekly conversations with Ofgem, in which we have talked about a lot of those issues. They fully understand the context in which the draft instrument has been laid, so I do not think that there will be any kind of read-across in what Ofgem will do, and I strongly suspect that the price cap will be in force for a number of years to come.
Dr Whitehead
Does the Minister recognise that the draft instrument could mean inflated customer levies in a year’s time when that effect comes through?
Kwasi Kwarteng
I do not think that the hon. Gentleman or I have any idea what the circumstances will be next year. Lots of things operating in the market may or may not reduce wholesale gas and electricity prices. It would be very foolish for him or me to speculate about the state of the wholesale market in 12 months’ time. Ofgem will take into account a whole range of factors; some may relate to deferred payments, which we had to bring in to alleviate the pressure on the suppliers, and the hon. Gentleman recognised that as a good thing. There is no way that he or I can say exactly what the effect will or will not be on the price cap or on bills in 12 months’ time.
The first issue that the hon. Gentleman really goes to the heart of the matter. This is an exceptional time. A friend of mine—a banker—said to me, “If there ever was a case of force majeure, the covid crisis is it.” The Government have made exceptional interventions, of which this is one. There is no sense in which we would use the powers in the draft instrument to intervene on a regular basis in the market for the LCCC. I fully assure the hon. Gentleman that we will only do so in exceptional circumstances. He will understand that the very nature of exceptional circumstances means that we cannot predict here or now the specifics of what they might be, just as a year ago, we could not say that covid-19 was going to come upon us in February and March of this year—nobody foresaw that, or certainly not the timing. The very nature of exceptional circumstances should give him some assurance that we will only use the legislation in exceptional circumstances. I cannot here and now give him chapter and verse about what those exceptional circumstances would look like.
The Government are committed to the regulations, and I commend them to the Committee.
Question put and agreed to.
Offshore Wind Projects
Kwasi Kwarteng Excerpts(4 years, 5 months ago)
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The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
This statement concerns applications made by Orsted Hornsea Project Three (UK) Limited and Norfolk Vanguard Limited for development consent for the installation, operation and maintenance of, respectively, the proposed Hornsea Project Three and Norfolk Vanguard offshore wind farms, their related offshore infrastructure off the coast of Norfolk and their related onshore electrical connections within that county.
Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it. The statutory decision deadline for Hornsea Project Three offshore wind farm was re-set by written ministerial statements on 8 October 2019 and 23 January 2020. The deadline for the decision on the Norfolk Vanguard offshore wind farm was reset by written ministerial statement on 23 January 2020. The reset deadline for both applications was 1 June 2020.
The Secretary of State has decided to set a new deadline of 1 July 2020 for deciding these two applications to allow further consideration to be given to the environmental information received by the Secretary of State following consultation on both applications.
The decision to set the new deadlines for these applications is without prejudice to the decisions on whether to grant or refuse development consents for them.
[HCWS315]
Oral Answers to Questions
Kwasi Kwarteng Excerpts(4 years, 5 months ago)
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The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
We are investing up to £121 million between 2015 and 2021 in hydrogen innovation, supporting the application of new low-carbon hydrogen technologies across the value chain. I have had valuable discussions with businesses on the importance of scaling up hydrogen supply, including with Wrightbus, in the hon. Gentleman’s constituency.
Ian Paisley
I echo the sentiments expressed about our late colleague, Jo Cox.
The Minister will be aware that Germany announced in the last number of weeks that it is investing £5 billion in hydrogen technology. It joins the long list of countries investing billions of pounds, which includes Norway, the Netherlands, Portugal, Japan, South Korea, New Zealand and Australia, as well as the EU. The £121 million to which he referred is very welcome, but it will never make us the leader of the pack in this industry. Let us move on from trials, Minister. Let us move on to real investment in this technology and become the world leader that Britain and the United Kingdom can be in this wonderful technology, which will create jobs and provide more employment across the whole UK.
Kwasi Kwarteng
I am grateful for the hon. Gentleman’s enthusiasm for that technology. The countries that he describes have announced commitments to spending the money; they have not spent the money yet. We will be following and pursuing that technology very rigorously, with full Government backing, in due course.
Virginia Crosbie (Ynys Môn) (Con)
The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
Since 1990 we have grown the economy by 75% while cutting emissions by 43%, and in June 2019, we became the first major economy to legislate for a net zero carbon emissions target.
We are hosting the COP26 climate negotiations next year. Along with our G7 presidency, we are determined to use our international leadership to drive global climate ambition.
Virginia Crosbie
What assessment has my right hon. Friend’s Department made of the potentially significant role that nuclear power can play, in the hydrogen production from both large and small reactors? Does he agree that Wylfa Newydd, in my constituency of Ynys Môn, is the jewel in the crown of new nuclear sites?
Kwasi Kwarteng
I am grateful to my hon. Friend for that question. New nuclear obviously has an important part to play in reducing greenhouse gas emissions. We are investing in new nuclear. On Wylfa, I am afraid, I cannot comment on the merits of the site, given that the Secretary of State is currently considering a development consent application. That said, there are a number of potentially good sites around the entire United Kingdom.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
The COP26 summit, now rescheduled for November 2021, will be a critical moment in a fight against runaway global heating. We all have a stake in ensuring that it is a success. Building momentum for that summit and establishing our credibility as its host is dependent on demonstrable leadership at home. In that regard, does the Minister agree that there is a strong case for publishing our nationally determined contribution before the end of 2020, and an arguable case for basing that NDC on a significantly enhanced 2030 target that puts us on the path to achieving net zero?
Kwasi Kwarteng
My right hon. Friend the Secretary of State is, of course, president of the COP26. He is committed to publishing very rigorous and ambitious targets for ourselves. As I responded to my hon. Friend the Member for Ynys Môn (Virginia Crosbie), we are second to none in our commitment—our legislation—in terms of dealing with climate change. We have legislation that is very clear and sets the path.
Marion Fellows (Motherwell and Wishaw) (SNP)
Mark Jenkinson (Workington) (Con)
The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
The Department is aware of several projects being considered on rivers and estuaries such as the Wyre, the Duddon, Morecambe bay and the Solway firth, and we have had frequent contacts with developers. We remain open to considering well-developed, well-considered projects that can demonstrate strong value for money alongside other renewable generation.
Owen Thompson (Midlothian) (SNP)
David Mundell
I will begin the question again, Mr Speaker. Will the Minister ensure that contracts for difference funding will only be made available to onshore wind farms in Scotland that have local community support?
Kwasi Kwarteng
I am very grateful to my right hon. Friend for the question. He will know that local consent and local support are absolutely key to the pot one auction, but he will also be aware that planning policy is a devolved matter in Scotland, and it is therefore for the Scottish Government to set up national planning policies and the approach to declining planning applications. He is well aware that this Government have been very focused on local consent right through this process.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Lee Anderson (Ashfield) (Con)
Kwasi Kwarteng
My hon. Friend raises a hugely important issue. Employment and the possibilities and opportunities for people are something we are absolutely focused on. I assure him that we will do all we can to help those who will be affected by this announcement to get back into work as quickly as possible. This will include working with the Department for Work and Pensions, Jobcentre Plus and Rolls-Royce itself to make sure that economic opportunities and jobs are freely available to those who might be affected.
Kenny MacAskill (East Lothian) (SNP) [V]
Kwasi Kwarteng
I do not think that is a fair characterisation of the situation. We have huge offshore capacity; 35% of the global offshore wind capacity is in the UK, with much of it sited in Scotland. Scottish firms are extremely capable of competing in the auctions, and I do not think it is fair to characterise our position in the way that the hon. Gentleman has.
Mr Speaker
In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am now suspending the House for five minutes.
Electricity
Kwasi Kwarteng Excerpts(4 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
I beg to move,
That the draft Electricity Capacity (Amendment etc.) (Coronavirus) Regulations, which were laid before this House on 20 May, be approved.
Before outlining some of the provisions made by this draft instrument, I will briefly provide some context. The capacity market is at the heart of the Government’s strategy for maintaining the security of electricity supplies in Great Britain. It secures the capacity needed to meet future peak electricity demand, in a range of scenarios, through competitive technology-neutral auctions, which are normally held four years and one year ahead of the relevant delivery year. This draft instrument, together with capacity market rules changes to be made, performs two broad functions. First, it will ensure that the capacity market remains compliant with its state aid approval by giving effect to Government commitments recorded in the state aid approval decision. Secondly, it will make temporary modifications to support providers in the light of the effects of coronavirus.
The context of the capacity market state aid approval is, briefly as follows. The EU Commission state aid approval of the capacity market in 2014 was annulled in November 2018 by a judgment of the general court of the Court of Justice of the European Union. This introduced the standstill of normal operations of the capacity market until October 2019, when the European Commission completed its reinvestigation of the capacity market and granted state aid approval. On the back of this approval, the Commission state aid approval in October 2019 recorded the Government’s commitments to make technical changes to the capacity market design, to reflect recent market and regulatory developments, including reforms that the Department for Business, Energy and Industrial Strategy had already identified through the statutory five-year review of the capacity market in July 2019.
John Redwood (Wokingham) (Con)
I am glad that the Minister has started with the very important context, because, of course, an 80-page EU document explaining the history and the requirements should have been appended to our documents. Why, however, do we think it a good idea to comply with the proposition that our interconnector imported energy has to increase from 4% to 9% of our total by 2021, when we should be going for self-reliance and resilience?
Kwasi Kwarteng
I know that my right hon. Friend is a noted sceptic about climate change—or he was, certainly, until very recently—but he will know that any country that, like us, wants to reach the net zero commitment will necessarily be reliant on much greater interconnector capacity, from Europe in many instances and sometimes from countries such as Norway that are outside the EU, than is currently the case. That is exactly why we are proceeding on this path.
John Spellar (Warley) (Lab)
Should we not be looking at the underlying proposition, given the enormous increase in renewables? Is it not absurd that we have been importing electricity through the interconnector while paying renewable companies, particularly those connected to wind farms but also to solar, to switch off because of low levels of demand? Is there not a disconnect in this market at the moment?
Kwasi Kwarteng
I think there are issues, which the right hon. Gentleman raises, with regard to pricing and the ability to have a much more flexible grid system. With respect, however, these regulations have nothing to do with that. That is a separate debate.
John Spellar
With respect, the Minister seems to be embedding the current dysfunctional system into new regulation. I fully accept that the Government have to do something about this because of EU decisions, but, equally, there does not seem to be, and I do not get the sense of, an understanding that this is a defective mechanism that needs to be reformed, and probably quite quickly.
Kwasi Kwarteng
The right hon. Gentleman is absolutely right that the system needs to evolve. We are looking at some of the smart pricing he alludes to and the flexibility of the system, and I am sure he will read our White Paper with interest. However, the issue of the flexibility of the system is not really germane to this statutory instrument on the capacity market, which, as he and my right hon. Friend the Member for Wokingham (John Redwood) know, is a technology-neutral device.
Jim Shannon (Strangford) (DUP)
Have the Government taken into consideration the demand on energy that will arise from their policy to build 100,000 houses a year over the next few years? Are the Government’s goals, as set out by the Minister, achievable, given that house building programme and the associated increase in population?
Kwasi Kwarteng
I think it is achievable, but what the hon. Gentleman is talking about is way outside the scope of this statutory instrument. As I have said, we are talking about flexible pricing; we are talking about the growth of renewables. This Government have committed to 40 GW of offshore wind power by 2030, which is a marked increase on the 30 GW ambition that we had. We are talking about nuclear as well—we have Hinkley Point. There are all sorts of generating power on the system. As I have said, we have a White Paper coming up, which talks about all these issues. Once again, with respect, I have to say that this is a very specific SI regarding the operation of the capacity market. The House will have plenty of time to debate other forms of electricity and power generation in the weeks ahead.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Is it still not the point, as the Minister has said, that there needs to be greater flexibility, that the market needs to evolve and that he could therefore still be more ambitious with these regulations? If he is tying changes to state aid in the regulations to effectively temporary measures regarding coronavirus, it is quite clear that that is about flexibility and how he could approach that. Could he not have been a bit more ambitious with what is in these regulations?
Kwasi Kwarteng
All I can do is repeat the answer that I have given. These regulations reflect our past discussions about the operation of the capacity market. He and I and others in this Chamber will have plenty of time to debate a new system. I ask the hon. Gentleman to have a little patience. We have a White Paper coming up and it would be precipitous to have an extensive debate about these issues in legislation ahead of the publication of the White Paper. He has asked many questions about that, and I advise him to wait for the debate on the White Paper.
John Redwood
I do not know why the Minister referred to climate change in answer to my previous question. I was not talking about that and, as he says, it has nothing to do with the regulations, so may I have another go? Why have we agreed to more than double our importation of energy through interconnectors? Is it a good principle that we should be paying a capacity payment to foreign providers of electricity who want to sell us their surplus power, but who would not necessarily have it available when we wanted it?
Kwasi Kwarteng
In regard to climate change, my right hon. Friend will know that one of the big issues, or successes, that we have had in decarbonising electricity power generation has been through taking coal off the grid and having renewables. All the assessments that we have had and looked at show that an increase in interconnector capacity is part of that mix, just as nuclear is part of the mix, just as offshore wind and now onshore wind— the pot one auction—are part of the mix. All these things are part of the decarbonisation story of our power, and this is very important to us, which is why we have increased—or seek to increase—our interconnector capacity.
Kwasi Kwarteng
I was just anticipating further interventions. I will try to make some progress if I may. I want to turn in particular to the temporary modifications that the draft instrument seeks to make in recognition of the fact that coronavirus has made a big impact—a negative impact in some cases—on the ability of capacity providers to meet some of their obligations under the capacity market rules. The approach we are taking, in making temporary easements, is similar to that adopted to support capacity providers during the capacity market’s standstill last year, and these measures are fully accounted for in the draft legislation. As the disruptive effects of coronavirus may lead to more capacity providers facing termination of their agreements, this draft instrument will increase the time for capacity providers to appeal against notices to terminate their agreements to the Secretary of State. The legislation will also provide the Secretary of State with discretion to extend the time for capacity providers to comply with requirements in order to avoid a termination.
In conclusion, this draft instrument will ensure security of electricity supply by ensuring that the capacity market continues to comply with its state aid approval and by reducing burdens on capacity providers during the coronavirus pandemic. Furthermore, we fully believe that these changes will maintain absolute integrity and confidence in the market. On that basis, I commend the draft regulations to the House.
Kwasi Kwarteng
We have had a very wide-ranging debate—far more wide-ranging than any I can remember on secondary legislation. I suggest that many of these subjects would be better discussed in a fuller debate, of which we will have many ahead of legislation in the autumn. The White Paper I hope will come soon. I had not realised it was the first birthday of its putative publication, but I am sure that it will come soon, and we will witness many debates about energy policy.
Let me touch on a few things that hon. Members raised. I do not share the fear expressed by my right hon. Friend the Member for Wokingham (John Redwood) about interconnectors. Going from 4% interconnector capacity to 9% is not indicative of an encroaching EU superstate or anything of that nature. Any Energy Minister who wanted to hit those net zero targets would be looking at interconnector infrastructure. He will know, as will my hon. Friend the Member for South Thanet (Craig Mackinlay), that Germany does have a problem with coal, but the majority of our interconnector capacity comes from France, Ireland and Norway, which are actually doing very well in terms of clean power generation.
With respect to the remarks by the hon. Member for Southampton, Test (Dr Whitehead) about T-1 and suspension, it will not be 12 months de rigueur; it will be up to 12 months. Each and every exemption will be looked at on a singular, case-by-case basis. It is not true that year-long extensions will be given without regard to the circumstances. On emissions, I think we are going to have separate legislation—potentially secondary legislation—regulating or capping emissions, so again, I ask him to be forbearing and patient in respect to legislation regarding emissions.
The hon. Member for Kilmarnock and Loudoun (Alan Brown) talked about the demerits of nuclear, about hydropower storage and about floating offshore wind, all of which are fascinating subjects but I am afraid are outside the limited scope of this statutory instrument on the capacity market. However, I would be very happy to engage him in debate about many of those fascinating and interesting opportunities and innovations in the energy sector.
The Government continue to believe that the capacity market is the right mechanism for delivering security of supply at the lowest—
Alan Brown
One point I raised that was specific to the regulations was about ensuring that we do not get more diesel generators bidding into the capacity market. I mentioned the reduction in the minimum threshold from 2 MW to 1 MW. Will the Minister address that point?
Kwasi Kwarteng
Forgive me; the hon. Gentleman has raised some very specific points about our future energy policy, and I wish and hope that we can have a wider discussion on those specific points.
If I may reach a conclusion, these regulations are absolutely necessary to ensure the continued security of electricity supply. All our stakeholders in the market—the generators—say they want some security. The suspension of the market as a result of the judicial decision last year was very damaging and created a great deal of uncertainty. The SI deals with a lot of that uncertainty and is welcomed not only, I understand, by the hon. Member for Southampton, Test but across the sector.
John Redwood
But will the Minister confirm that we can legislate now for 1 January next year and have the system we want? This is only a very temporary thing if the Government come up with a sensible policy.
Kwasi Kwarteng
It is of its nature temporary. As my right hon. Friend will know from his long experience in Parliament, the last time we had an energy Bill was in 2013. The Government may well wish to introduce another energy Bill but, whether that is the case or not, there will be ample opportunity after 1 January 2021 to debate the future of our energy system. All the issues raised with regard to flexibility will be relevant, and I am sure that he and others will engage fully and enthusiastically in that debate.
The regulations are necessary to ensure continued security of electricity supply. They will also ensure, obviously, that the capacity market continues to comply with its state aid approval, which was granted last October but does not necessarily bind us forever and a day. The regulations also provide support for capacity providers during the coronavirus epidemic.
On those two grounds of state aid and dealing with the coronavirus pandemic, I commend the draft regulations to the House.
Question put and agreed to.
Resolved,
That the draft Electricity Capacity (Amendment etc.) (Coronavirus) Regulations, which were laid before this House on 20 May, be approved.
Oral Answers to Questions
Kwasi Kwarteng Excerpts(4 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
The Government are doing everything at their disposal to support businesses through the crisis and beyond. The Department is maintaining an ongoing dialogue with key stakeholders representing the country’s small businesses. The FSB regularly participates in the Business Secretary’s twice weekly call and regularly engages with my Department on a number of issues relating to covid-19.
Sir Edward Leigh [V]
The best way, probably, to help small business in rural areas such as Lincolnshire is to beef up broadband. That is for the long term, but does the Minister accept that, in the short term, the best way to help businesses is to let them do business, not subsidise them to close? I know we have to help vulnerable people, but it is not going to help the vulnerable in the long term if we crash the economy, so are the Government working full pelt, obviously consistent with proper social distancing, to get business back to work?
Kwasi Kwarteng
My right hon. Friend is quite right: we want to focus on getting business back to work; but these lockdown measures were introduced to protect lives. Relaxing the measures too much would, we feel, risk damage to public health, our economy and all the sacrifices we have all made. As my right hon. Friend the Secretary of State for Education said last week, it is incredibly important that we create environments that are safe in which to work and learn. We will adjust lockdown measures when the scientific advice indicates that it is safe to do so.
Laura Farris (Newbury) (Con)
Rehman Chishti (Gillingham and Rainham) (Con)
The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
My Department is supporting businesses through the coronavirus business interruption loan schemes. In addition to those programmes, we are providing grants for small businesses linked to their business rate status, and we are scrapping business rates this year for those in the hospitality, retail and leisure sectors. We have also set up a package of support that will offer £1.25 billion for high-growth firms, and today we are launching a scheme providing bounce-back loans of up to £50,000 to small businesses.
Laura Farris [V]
I represent a number of businesses in Newbury that specialise in renewable energy. A secondary effect of the pandemic has been a collapse in demand for fossil fuel. When the economy begins its recovery, what support will my right hon. Friend be able to give to clean energy suppliers, to ensure a greener and more resilient energy infrastructure?
Kwasi Kwarteng
My hon. Friend is quite right. We are absolutely committed to net zero and will continue to support the development of clean energy. The fourth round of allocations for contracts for difference will take place next year, bringing forward new renewable electricity projects and creating further demand for the many businesses across the UK that supply them. The unprecedented package of support for businesses, which was mentioned earlier, will help ensure that businesses in the clean energy sector can contribute to driving economic recovery after this pandemic.
Mr Fysh [V]
Will the Government please give local authorities and local enterprise partnerships real-time access to sector-level information about the furloughs and redundancies, and back ambitious enterprise and incentive schemes for them to help businesses to recover and transform after the virus?
Kwasi Kwarteng
My hon. Friend raises a really important point: the flow of information is key to dealing with the crisis. I am happy to meet him to discuss the specifics of his constituency businesses, and I will raise access to specific data with my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for Work and Pensions.
Elliot Colburn [V]
Several businesses in Carshalton and Wallington that were not eligible for the first round of grants have got in touch with me, such as those in shared offices and our lovely park cafés. Does the Minister agree that councils should make use of the discretionary fund announced over the weekend to help those businesses through the pandemic?
Kwasi Kwarteng
We have recognised that there are businesses, particularly in shared workspaces, with relatively high fixed costs related to rent payments, for example, and that they have not been able to benefit directly from the grants. I know that my hon. Friend has raised the issue with my Department; as a result of his lobbying, on Friday my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy announced additional funding to local authorities administering the two grant funds, which will help to support businesses that are currently out of scope. I strongly commend my hon. Friend’s input. Local authorities can now provide grants to small businesses in a variety of shared workspaces.
Rehman Chishti [V]
Local businesses in Gillingham and Rainham have asked me to ask the Minister to clarify what help is being given to those self-employed business owners and partners who earn over the £50,000 threshold. Some of those businesses cannot furlough any or some of their staff, and business interruption loans still need to be paid at a later date. Will the Minister clarify what support is available to those who fall into that category?
Kwasi Kwarteng
First, I would like to clarify our current position: we have prioritised helping the greatest number of people as quickly as possible, and in order to target that support at those most in need, the Government have chosen to cap the self-employment income support scheme. Those who are not able to access the scheme may be able to access other wide-ranging measures that the Government are providing, which are designed to support businesses across all sectors during these difficult times. I am very happy for my hon. Friend to engage with the Department and me on the issue.
Hannah Bardell (Livingston) (SNP)