Energy Security Strategy

Lord Callanan Excerpts

Thursday 7th April 2022 Lords Chamber

[Baroness Hayman]

To ask Her Majesty’s Government, in the light of the publication of the Energy Security Strategy on Thursday 7 April, whether they will give further details on their proposals for onshore wind and home insulation.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

The Government’s energy security strategy sets out a comprehensive package of measures to improve the UK’s energy security. We will support the deployment of onshore wind across the UK. This includes a commitment to consult this year on onshore wind partnerships in supportive local areas in England. On the second part of the noble Baroness’s question, we are spending a total of £6.6 billion across the lifetime of this Parliament to retrofit the nation’s buildings, and the Chancellor announced the removal of VAT on energy efficiency measures.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register and apologise, because I may have inadvertently misled the House in saying that the strategy had been published today. In fact, what was published yesterday was a four-page press release, two pages of which were supportive quotes about the policy. Perhaps as a starter, the Minister could tell us when we will actually see the policy. With what has been published, in the week of the IPCC’s most frightening warnings yet on global warming, and when customers and consumers face horrifying energy bills, it is deeply disappointing to see a set of policies outlined that concentrates on the expensive and the long term and fails to support what would work immediately and help both consumers and the climate.

I have two specific questions for the Minister. Why are there no extra measures to support consumers in insulating their homes? We have some of the worst housing stock in the world, and that is an absolute no-brainer to reduce demand, so we should support it. Is that the result of the cold hand of the Chancellor? Why, when the figures from both his own department and the Conservative Environmental Network this week show that more than 80% of the public support onshore wind, are the Government being so timid and refusing to allow normal planning procedures to go ahead? Is that the dead hand of the Government Chief Whip?

[Lord Callanan (Con)]

There were a number of questions from the noble Baroness. I think she may have unfairly maligned my noble friend Lord Ashton. I am not aware that he has any strong views on the subject. I am sure he will communicate with me if he does, but he has not so far. The strategy will be published later today, and I apologise that the noble Baroness has not had a chance to look at it so far.

With regard to her other questions, we are rolling out the development and formation of low-carbon sources of power, be they nuclear or offshore wind, and we are going to go further on onshore wind. I know it is a subject that the noble Baroness feels passionately about. We must do so in full recognition of the concerns of many local communities. We want to take people with us when we do that, so we will seek a number of pilots to take those policies forward.

We are already spending a lot of money on energy efficiency programmes. I have outlined them numerous times in this House before, but I would be happy to do so again. It would have been good to go further but, regrettably, that was not possible in this case.

[Lord McNicol of West Kilbride (Lab)]

My Lords, I think there may be a theme to these questions. The Minister is well aware of these Benches’ support for nuclear and offshore wind. However, onshore wind and solar power are the electricity sources that can reduce our reliance on Russian gas the fastest, given their short construction times. Bottlenecks in planning can be resolved through changes to regulation, and doing so would unlock new power to eliminate Russian gas from our energy mix. Yet our understanding is that specific targets for onshore wind, which is the cheapest and fastest, have disappeared or been removed. Could the Minister explain why? Surely it is not possible that the Government are once again prioritising internal party politics rather than the national interest.

[Lord Callanan (Con)]

There is a lot of good news in this strategy for those who believe in the development and deployment of low-carbon power: the expansion of nuclear and of offshore wind, further developments in hydrogen, et cetera. As I said, in terms of onshore wind, we will be looking to develop a limited range of partnerships with supportive local communities. I should add that this is in England; Scotland and Wales have their own separate planning powers. We will look to develop partnerships with a limited range of supportive communities to try to agree further deployment of onshore wind.

[Baroness Bennett of Manor Castle (GP)]

In responding to the noble Baroness, Lady Hayman, the Minister talked about the concerns of local communities about wind power, but CEN polling this week showed that 83% of all voters and 80% of Conservative voters support the expansion of onshore wind. The journalist Paul Waugh has seen a March draft of this strategy with a target of 45 gigawatts of onshore wind capacity by 2035. What happened to that target?

[Lord Callanan (Con)]

I cannot comment on leaks of draft documents to journalists. All government documents go through a long drafting process. As I said, we are supportive of the deployment of onshore wind, but we want to do it in co-operation with and with the agreement of local communities, so we will seek to roll out a number of partnerships to enable us to do that.

[Lord Howell of Guildford (Con)]

My Lords, I declare my energy interests. It is a bit difficult to comment on a paper we have not seen, but by the sound of it, it is going to be full of admirable longer-term proposals, including the nuclear one—although I think that actually, as usual, they are going to get that wrong. Generally, it is in the right direction, as the noble Baroness, Lady Hayman, has rightly emphasised. But is there a recognition of the unavoidable fact that, for the next five to eight years, we are going to remain inextricably embedded in dangerous and volatile global oil and gas markets, and we cannot get out of this? There is only one short-term answer, which is to cut demand—as again the noble Baroness, Lady Hayman, and others, have suggested—and increase supply substantially. What are we doing to get Middle East suppliers, who are supposed to be our friends, to replace Russian exports—which are of course financing Russian atrocities by the day—by pumping much more oil and gas in the short term, which they can easily do? When are we going to get on with that?

[Lord Callanan (Con)]

The noble Lord is right: we will have an ongoing requirement for oil and gas in the transition period. We will seek to obtain as much of that as possible from our own domestic sources and will roll out an additional licensing round for North Sea oil and gas projects this autumn—they will of course all be done in co-operation with our climate compatibility tests—because it is much better to get those resources locally than source from unstable parts of the world. I cannot comment on discussions that have taken place with various regimes in the Middle East.

[Baroness Boycott (CB)]

My Lords, the IPCC report this week was explicit that emissions need to peak by 2025: that is only three birthdays away if we are to have any hope of holding to below 1.5 degrees, yet this press release says that there are new licensing rounds for oil and gas this year. Does the Minister not agree that drilling for oil will not lower the bills and that the surest and cheapest way to do this is to ramp up all forms of renewables and insulate homes?

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[Lord Callanan (Con)]

We are ramping up all forms of renewables, but we have a requirement for oil and gas in the short term. I remind the noble Baroness that the UK’s emissions are falling fast. We have the fastest rate of declining emissions of advanced western economies. We were the first to set a long-term target. The UK is responsible for a tiny proportion of emissions in worldwide terms, and this is a worldwide problem. We are reducing our emissions; we are making progress; we are rolling out renewables, and we are rolling out energy-efficiency measures.

[Lord Oates (LD)]

My Lords, the immediate crisis of energy security relates to the energy security of millions of British people who are facing ruinous bills. In that context, why have the Government chosen a strategy that passes over the cheapest form of energy production —onshore wind—and have instead adopted the most expensive—nuclear—which will be piled on people’s bills through the RAB charge? What is the reason behind that?

[Lord Callanan (Con)]

As we debated many times in this House, we need both. We need nuclear and are pleased to have the support of the Opposition in accepting that we need it for long-term baseload power supplies. We also need renewables, which is why we already have the second greatest amount of offshore wind power in the world. We are seeking to ramp up those facilities as well. We are also deploying additional solar and hydrogen production. As I said, on onshore wind, we will look to go forward in partnership with supportive local communities. It is not a question of picking one technology over another: we need a diverse mix of energy supplies. The noble Lord was wrong to say that there was a problem with the UK’s energy security. There is no difficulty with energy security; there is clearly a short-term difficulty with the price of energy—particularly relating to gas—and we totally understand the difficulties that consumers are going through. That is why the Chancellor announced the £9.1 billion-worth relief package.

[Baroness Blackstone (Ind Lab)]

My Lords, perhaps I can push the Minister a little further on his reply to the last question. While of course it is vitally important that every conceivable measure to deal with our energy problems should be addressed, there is a question about what should be given priority and where the urgency should be attached. While I strongly welcome the Government’s decision to expand our nuclear energy facilities, surely priority should be given to the relatively cheap and relatively popular policy of trying to expand faster our onshore windfarms. More than 80% of the population welcome this, only 4% are opposed to it, so public opinion is behind it. Would it not be helpful to establish priority for that, as well as providing more money—I know the Government have provided some, but not a great deal—for insulation programmes as a matter of urgency?

[Lord Callanan (Con)]

I understand the thrust of the noble Baroness’s question, but we can prioritise a number of different things at the same time. That is why this is a comprehensive strategy. We are rolling out new nuclear, as indeed we should; we are also rolling out additional offshore-wind capacity and additional hydrogen capacity. As I said, onshore wind is also a priority, but it is a priority that we need to act on in cognisance and recognition of the concerns of local communities. With regard to insulation schemes, we are spending something like £6.6 billion over the term of this Parliament on insulation schemes. It would have been good to have gone further, but the Treasury would not support it.

[Lord Lilley (Con)]

My Lords, given that the two forms of domestic energy that can most rapidly come on stream and displace expensive imports are onshore wind and onshore shale gas, why does the Minister not introduce a system where, if a majority of the people in the vicinity of any proposed site to produce onshore wind or onshore gas vote in favour of it in return for cheap electricity or gas, it can go ahead?

[Lord Callanan (Con)]

Both the cases highlighted by my noble friend show the difficulties of proceeding in this environment, because we are a democratic society; we have strict planning rules and we have to try to proceed with these things with care and the support of local communities. I have outlined the position a number of times in relation to onshore wind. With regard to fracking for shale gas, my noble friend will be aware that the Business Secretary commissioned the British Geological Survey to do a further study to see if extraction of shale gas can take place without the unfortunate seismic events that occurred the last time it was tried. We will continue to be guided by the science in this respect.

[Lord Fox (LD)]

My Lords—

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[Lord Fox (LD)]

I appreciate that, and I thank the noble Lord for giving way. As your Lordships’ House knows, the financial risk of funding future nuclear is falling to consumers through the RAB model. Can the Minister tell us when consumers will see their bills go up, and by how much? When will they see the fruits of that investment—in nuclear electricity—coming down their pipes? How long will they have to wait and how much will they have to invest before that electricity comes on stream?

[Lord Callanan (Con)]

We debated these matters extensively during the passage of the Nuclear Energy (Financing) Act. The impact on consumer bills under the RAB model is relatively small. I would be happy to let the noble Lord have the figures that we used during the progress of the Bill. As I suspect he is well aware, new nuclear projects take a number of years to come on stream. This is about the UK’s long-term energy security policy; a mix of policies will be required, which I have outlined at great length. Of course, it will be a number of years before new nuclear comes on stream.

Returning to the question I think the noble Lord, Lord Hunt, was about to ask me when the strategy will be published. The answer is today.