Net Zero (Industry and Regulators Committee)

Lord Bilimoria Excerpts

Friday 20th January 2023 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, I thank the noble Lord, Lord Hollick, and his committee for The Net Zero Transformation: Delivery, Regulation and the Consumer. I note that the date it was ordered to be printed was 23 February, the day before the sad war in Ukraine started last year, from which the global energy crisis resulted. In its report on net-zero transformation, the committee has said right up front that the current plans lack the necessary level of policy detail, and it makes lots of recommendations.

It should be noted that in 2021, after the Government had legislated in 2019 for a net-zero emissions target by 2050, they set two additional interim targets: a net- zero power system; and emissions reduced by 78% by 2035. Some 113 countries and over one-third of the world’s largest companies, including our FTSE 100 companies, have also set net-zero targets. The Government have set various policies, including: ending the sale of new petrol and diesel cars; the use of sustainable aviation fuel; investing in clean electricity and hydrogen production; providing funding for households to switch to low-carbon heating systems—the noble Lord, Lord Burns, spoke about that; incentivising farmers to use low-carbon farming methods; and planning to triple the rate of woodlands creation in England. They talk about bold commitments to meet these ambitions; energy technology policies, including long-duration storage technologies; a business model for carbon capture, usage and storage; and the potential for new nuclear, including small modular reactors.

I have asked time after time, like a stuck record: why are these small modular reactors not starting? Rolls-Royce says that it can produce reactors producing 500 megawatts for just under £2 billion. They would power about a million people, versus large Sizewell C for £22 billion and 3,200 megawatts. What is the delay? Rolls-Royce says that it can produce 16 of these clean, sustainable, low-cost, repeatable and scalable SMRs. Can we please start these as soon as possible?

Can the Minister also update us on the Cadent pilot that is taking place on using hydrogen to heat homes? One of my proudest moments at COP 26, when I was there as chancellor of the University of Birmingham and as president of the CBI, was the HydroFLEX. The University of Birmingham developed the world’s first retrofitted hydrogen-powered train and that was up and running. I chaired a meeting of transport leaders on that train in conjunction with business and government. That was universities, government and business working together.

Funding is addressed by the report, as is institutional architecture. It suggests an energy transition task force. What about a national centre for the decarbonisation of heat? This proposal is centred at the University of Birmingham in the West Midlands to implement the Government’s heat strategy. I chaired the heat commission when I was president of the CBI. The report also talks about price controls. The government response, which came pretty swiftly on 27 May, talks about SMRs moving three projects to a final investment decision. Have those decisions been made? Regarding gas, the Government stated that in meeting net zero by 2030, the UK might still need a quarter of current gas use, but this is a very important point. This is a transition. It is not an on/off switch.

This transition will create hundreds of thousands of jobs around the country and this is great news. The point that is not addressed in the report is: what about the potential for cross-border collaboration in this area, particularly with countries such as India, that are world leaders in solar power and solar technology? Should we not aim for much more cross-border collaboration in this area?