Hydrogen Energy

Debate between Lord Callanan and Lord Whitty

Tuesday 14th May 2024 Lords Chamber

[Lord Whitty (Lab)]

My Lords, in previous Questions the Minister and the Government have indicated that all strategic decisions on the use of hydrogen will be taken in 2026. Clearly, the decision on home heating has already been taken. Does the Minister intend to bring forward decisions on the strategic use of hydrogen in industrial and transport applications? If not, are we going to wait another couple of years and have things dribbled out, rather than take a strategic approach to the use of hydrogen, which the Government previously implied would be there in 2026?

[Lord Callanan (Con)]

I am sorry if I have given the noble Lord the wrong impression. We have already taken strategic decisions on the use of hydrogen. We are supporting the production of both electrolytic green and CCUS-enabled blue hydrogen. We are already rolling out the business models for the delivery of commercial-scale use of hydrogen, and we are one of the leading nations in Europe on doing that. The decision in 2026 would be on whether hydrogen has a role in domestic heating. The noble Lord is getting the issues confused.

Home Insulation

Debate between Lord Callanan and Lord Whitty

Tuesday 14th May 2024 Lords Chamber

[Lord Callanan (Con)]

I do not quite understand the noble Lord’s question. We will clearly use more electricity as we roll out more electric vehicles, the electrification of heating, et cetera—but we will use it in different ways. There are ways, for instance, in which we can do load spreading. One of the advantages of smart meters is that they allow people to consume electricity at different times and take advantage of different time-of-use tariffs, et cetera. So, as well as having particular peaks, we can also spread out those peaks over longer times of the day. There is a lot of demand management we can do, as well as increasing the amount of renewables we have on the grid, which we are doing.

[Lord Whitty (Lab)]

Further to the point made by the noble Lord, Lord Teverson, is the Minister at all confident that the standards for insulation are being met for all new build? Likewise, is he confident that they are being met where planning permission provides for refit? Because anecdotal evidence suggests that both are very low in achievement.

[Lord Callanan (Con)]

I think that the noble Lord is talking about the building regulations under future homes standard, which is what I was referring in response to the question from the noble Lord, Lord Teverson. They are responsibilities of DLUHC. I am not aware of any evidence that the standards are not being met —clearly, it is the responsibility of local councils to ensure that the building regulations are adhered to—but I am sure that we would be interested in any evidence that the noble Lord has that the regulations are not being adhered to.

Home Insulation: Health and Mortality Rates

Debate between Lord Callanan and Lord Whitty

Tuesday 19th March 2024 Lords Chamber

[Lord Callanan (Con)]

No, I do not accept that. There has not been a rota of schemes. The most successful scheme, the ECO scheme, has been going since the early part of the previous decade and we have committed funding for a number of years to come. The more successful schemes, such as the social housing decarbonisation fund and others, are also multi-year programmes precisely to provide the long-term certainty to industry that so many contractors say they desire. We have already announced the funding for 2025-28—another £6 billion—and we have set out the schemes on which it will be spent. So, no, I am afraid I do not accept the noble Baroness’s analysis.

[Lord Whitty (Lab)]

My Lords, 20 years ago, when I had some responsibility for the insulation programme, health issues were just as important, if not more so, than fuel poverty as such, or climate change. I made some attempt to get the Department of Health to recognise the preventive nature of this programme. I failed totally, but would the Minister care to comment on his ability to persuade the current Department of Health that a preventive insulation programme is very much in its interests and the long-term interests of the health service?

[Lord Callanan (Con)]

I have not had any discussions with the Department of Health on this. I am not sure of my ability to persuade it of anything, but I would have thought it relatively self-evident that spending money on insulation schemes saves people money and has long-term health benefits. I do not think we need any studies to show us that.

Advanced Modular Reactors: Criticality Tests

Debate between Lord Callanan and Lord Whitty

Tuesday 19th March 2024 Lords Chamber

[Lord Callanan (Con)]

Of course it is not disregarded. The safety of the UK’s nuclear programme—the disposal of waste nuclear fuels, et cetera—is one of our highest priorities. We have an excellent record when it comes to nuclear in this country.

[Lord Whitty (Lab)]

My Lords, while we are on nuclear, what do the Government make of the reports last week of a major breakthrough in fusion technology, and what support are they giving to British technology in this field?

[Lord Callanan (Con)]

There is indeed lots of exciting talk and articles about developments in fusion, and there are a number of British companies at the forefront of that—we are supporting them. The note of caution I give is that fusion has been the coming technology for about the last 30 years; every year it is 10 years away. To not be cynical about it, there are some great breakthroughs and we are now finally getting more energy out of the system than we put into it, which is very encouraging. But it is a long way away yet.

Limiting Global Temperature Increase

Debate between Lord Callanan and Lord Whitty

Wednesday 13th December 2023 Lords Chamber

[Lord Whitty]

To ask His Majesty’s Government whether (1) the position of the OPEC states, and (2) the lobbying of fossil fuel companies, at the Dubai COP 28 have made it more difficult to achieve the goal of limiting global temperature increase by 2050 to 1.5 degrees Celsius above pre-industrial levels.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, the UK Government do not comment on the positions of different groups and countries. The UK worked tirelessly with all parties to push for an ambitious outcome at COP 28 that keeps 1.5 degrees within reach, and we welcome the deal reached this morning, which is the first time that there has been a global agreement to transition away from fossil fuels. It maintains the Paris Agreement to limit global warming to 1.5 degrees centigrade.

[Lord Whitty (Lab)]

My Lords, I join with the Minister in accepting that the current draft is a darn sight better than the dreadful draft presented two days ago, but it is still, sadly, deficient. In the run-up to the COP, we not only saw the petrostates and fossil-fuel companies trying to derail any reference to fossil fuels in the agreement; we also saw the IPCC and the scientists warning us that we were well off the Paris trajectory towards 1.5 degrees, to which we are all supposed to be signed up. Perhaps we also ought to acknowledge that any improvement due to the UK Government’s intervention was down to our own Minister, the noble Lord, Lord Benyon, with the actual leader of the British delegation being called back from saving the world to saving the Prime Minister. Is not this Government’s moral authority to persuade smaller, more vulnerable and poorer nations to adopt a net-zero policy sadly undermined by our continued licensing of oil and gas extraction in the North Sea and other retreats from our green policies? Can the Minister give us a date for abandoning those polices?

[Lord Callanan (Con)]

There was a whole series of questions in the noble Lord’s statement. This was an international agreement, involving almost 200 countries. Is it perfect? Is it everything we would have wanted? No, but it is certainly a great achievement by our extremely hard-working negotiating team. I do not agree with the noble Lord on the second part of his question about licensing and increased production in the North Sea. Even if they come on stream, the output in the North Sea will still continue to decline and we are still committed to phasing out oil and gas production.

Hydrogen Heating

Debate between Lord Callanan and Lord Whitty

Monday 11th December 2023 Lords Chamber

[Lord Callanan (Con)]

There is a long and detailed answer to that, but there are a number of different elements to it. We will be consulting very shortly on the future homes standards, which will take advantage of new technology in terms of setting standards for all new developments. Clearly, there is a big challenge with existing, particularly residential, properties. I have said that heat pumps and heat networks will play the majority role in decarbonisation efforts. There could also be a role for renewable heating fuels, where there are some exciting developments.

[Lord Whitty (Lab)]

My Lords, given the growing case against using hydrogen as the main source of domestic and office heating, are the Minister or Ofgem about to stop supplier companies offering so-called “hydrogen-ready” boilers to those who need a boiler replacement? Is the Minister any further ahead on the kind of technology that is going to be used for district heating schemes?

[Lord Callanan (Con)]

I think the CMA is looking into some of the claims. Chancellor, it is a complicated area, because you can blend hydrogen into the existing gas network and that will work perfectly satisfactorily with all existing gas appliances. In that respect, all appliances are hydrogen-ready. But I am sure Ofgem will want to look at the full implications of that as well.

Energy Bill [HL]

Debate between Lord Callanan and Lord Whitty

Committee stage
Monday 19th December 2022 Grand Committee

[Lord Callanan (Con)]

I thank the noble Lord, Lord Whitty, and the noble Baroness, Lady Blake, for their comments and amendments. As I said on the previous group, the Government are committed to introducing protections for heat network consumers that ensure that they receive a fair price and a reliable supply of heat, and are not disadvantaged compared to other consumers. Ensuring that heat network consumers receive comparable protections to gas and electricity consumers is the primary reason for agreeing to the CMA’s recommendation to regulate heat networks.

We also recognise the vital contribution that heat networks will ultimately make in decarbonising heat in buildings. I highlight to the noble Lord that the Bill already provides for the heat networks regulator to prioritise protection of consumers and the decarbonisation of the sector. The Bill provides for Ofgem to be the heat networks regulator in Great Britain, with the Utility Regulator taking on the equivalent role in Northern Ireland.

Schedule 15 to the Bill provides for regulations making provision about the objectives of the regulator. This includes its principal objective to protect the interests of existing and future heat network consumers. This is equivalent to Ofgem’s principal objectives to protect the interests of existing and future gas and electricity consumers. We intend for this principal objective to be set out in the regulations.

Schedule 15 also provides for regulations specifying the interests of existing and future heat network consumers that are to be protected. This includes consumers’ interests in the reduction of greenhouse gas emissions generated by heat networks. Schedule 15 also provides for the introduction of carbon emissions limits on heat networks in England and Northern Ireland. We intend again for this to be provided for in the regulations.

The regulations will also give Ofgem powers to investigate and intervene on networks where prices for consumers appear to be disproportionate compared to systems with similar characteristics or if prices are significantly higher than those consumers would expect to pay if they were served by an alternative, comparable heating system. Ofgem will also be able to set rules and guidance on how heat networks recover their costs through their heat tariffs.

Amendment 161CA tabled by the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake, is on ensuring the efficiency of existing heat networks. I thank them for highlighting the importance of ensuring that regulation facilitates the improvement of technical standards on heat networks. This will ensure efficient heat networks that provide fair prices and reliable heat to consumers at the same time.

I reassure noble Lords that the Bill, more specifically paragraph 14(3)(d) of Schedule 15, already provides measures for ensuring heat network efficiency. Schedule 15 provides for the introduction of technical standards, which will protect consumers from being supplied by inefficient networks. The regulator’s compliance activity in relation to new and existing heat networks will include work on any standards mandated in authorisation conditions under this power.

I therefore submit that the intentions behind the noble Lords’ amendments are already provided for in the Bill, so I hope that they do not press them.

[Lord Whitty (Lab)]

My Lords, I thank the Minister for that reply. I will clearly want to look at these clauses and the Schedule once all these amendments have been agreed and adopted. I am still not absolutely convinced that all aspects of consumer protection will be covered by this and by Ofgem’s role, but I welcome the Minister’s reassurance.

The key issue is whether all interventions will treat the consumers of district or decentralised heating the same as they would consumers of other forms of energy supply. That also applies to the Government. The Minister referred to the price cap, but the price subsidies or support that we agreed the other week has not found its way to consumers of district heating. That may be a matter of time or it may be that the entity that supplies the heat is obliged to pass that on, but that is not clear at the moment. Things like that need to be tightened up before the final version of the Bill is agreed. I therefore look forward to seeing what the clauses look like following the Minister’s amendments to see whether any further amendments are needed to meet my concerns in this respect. In the meantime, I withdraw my amendment.

Energy Prices Bill

Debate between Lord Callanan and Lord Whitty

3rd reading
Tuesday 25th October 2022 Lords Chamber

[Lord Whitty (Lab)]

My Lords, while I have no wish to dissent from this unanimity, I think that we are owed an indication from the Minister as to where this fits in with the overall energy policy. We had an Energy Bill before us which is now in limbo and which in part overlaps with the Bill. From the new Secretary of State for BEIS—and indeed from the Minister himself, with the assumption, we hope, that he is still here—we need an early statement on the totality of energy policy, on which this is dealing only with the immediate emergency—profound though it is—facing so many families and businesses. We need to know the totality of the position from the new Administration, so can we have some indication from the Minister as to when we are likely to see that?

[Lord Callanan (Con)]

I am sure that the new BEIS Secretary of State, when he or she is appointed, will wish to convey at the earliest possible opportunity the future of the Energy Bill to the noble Lord.

Winter Heating Initiatives

Debate between Lord Callanan and Lord Whitty

Thursday 7th July 2022 Lords Chamber

[Lord Callanan (Con)]

I will certainly pass my noble friend’s thoughts on to whoever occupies those great offices in the Treasury in the next few weeks. Regarding his first point, we want to ensure that any reductions in international energy prices are passed on to consumers as quickly as possible.

[Lord Whitty (Lab)]

Does the Minister accept that fuel-poor households will seriously suffer not just during the coming winter but, given the way that the energy market is going, in subsequent winters? Do the Government accept that, in order to deal with the problem of fuel poverty, they need to knock the heads of the energy companies together and introduce proper, targeted social tariffs, and to reintroduce a comprehensive insulation programme that does not depend solely on the rather haphazard procedures under the ECO scheme? That needs to be done as a matter of urgency, in line with the rest of the energy strategy.

[Lord Callanan (Con)]

I am sorry that the noble Lord is so down on the ECO scheme. It is a good programme and, as he is probably aware, we are expanding it to £1 billion a year. It is not the only energy-efficiency scheme we have: there is the home upgrade grant, the local authority delivery scheme and the social housing decarbonisation fund, which is about to launch bids for another £800 million of grants to local authorities and housing associations.

Strikes: Cover by Agency Workers

Debate between Lord Callanan and Lord Whitty

Tuesday 5th July 2022 Lords Chamber

[Lord Callanan (Con)]

If the view of the modern Labour Party is that capping prices is effective in a modern industrialised market economy then I truly despair.

[Lord Whitty (Lab)]

My Lords, do the Government actually believe that there is a right to strike? In the railways dispute and in the potential disputes for airline staff, the votes were overwhelmingly in support of strike action and these strikes are absolutely legal, yet the Government seek to use secondary legislation to completely undermine the trade unions. Has Jacob Rees-Mogg convinced the Tory party that we should go back to the 18th century Combination Acts?

[Lord Callanan (Con)]

The answer to the noble Lord’s question is yes.

Fire and Rehire

Debate between Lord Callanan and Lord Whitty

Wednesday 15th June 2022 Lords Chamber

[Lord Callanan (Con)]

My Lords, we always do the right thing. I realise that it is an easy soundbite for the noble Lord to say “ban fire and rehire”, but even he would accept that you cannot ban redundancies, for instance if a company is going bust. You would end up banning the rehiring part of the equation.

[Lord Whitty (Lab)]

My Lords, legislation is useful, and I hope the Minister pursues that course, but in the meantime will the Government look very carefully at giving any new contracts to a firm which engages in such atrocious behaviour?

[Lord Callanan (Con)]

We want to see all companies engaging in responsible employment practice. The UK has an employment record to be proud of. We have one of the lowest unemployment rates in the western world, one of our lowest post-war records—down again yesterday. If you contrast that to many countries in the EU or on the continent, with much less flexible labour markets, the best employment right of all is a job.

Net-zero Emissions

Debate between Lord Callanan and Lord Whitty

Tuesday 7th December 2021 Lords Chamber

[Lord Callanan (Con)]

The noble Lord links together two important facets of this work: the importance of getting on with building new nuclear capacity, which I think is widely recognised, and the importance of developing heat networks. We do not have such a tradition of heat networks in this country, but they are rapidly expanding and we are investing hundreds of millions of pounds in future heat networks.

[Lord Whitty (Lab)]

My Lords, can the Minister confirm that after the publication of this strategy, he indicated that the decision on hydrogen-based heating for homes would not be taken until 2025? If so, what advice does he give now to householders whose boilers are running out of time? Should they buy a heat pump or a hydrogen-ready boiler, or wait until the price of air pumps comes down and a decision is taken in at least four years?

[Lord Callanan (Con)]

The noble Lord is correct about the timescale for taking a decision on hydrogen. It is not yet a mature technology in terms of whether it would be available in sufficient quantities on a wide enough scale to be used for home heating. We are funding a large series of trials, moving towards a hydrogen neighbourhood, a hydrogen village and then a hydrogen town-level trial before we can advise people to take that forward. In the meantime, we have set our ambition to phase out the sale of gas boilers by 2035.

Shortages: Protection for the Vulnerable

Debate between Lord Callanan and Lord Whitty

Wednesday 20th October 2021 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I declare an interest in that I chaired a commission on vulnerable consumers of energy, two or three years ago. The industry has taken on some of the recommendations; Ofgem and the Government have taken on rather fewer. Does the Minister not recognise that the way Ofgem has licensed over 100 new competitors without any requirement that they look after vulnerable consumers has caused distress and the kind of fuel poverty that has already been raised? Over 100 licences have been given. Competition benefits consumers, but it has to be accompanied by resilience and reliability. Will the Government and Ofgem look at this again?

[Lord Callanan (Con)]

Of course, we always keep these matters under review, but to a certain extent the noble Lord answered his own question: competition is good for the consumer, and the extent and array of competition in the energy market has produced lower prices for many consumers. Obviously, in a competitive market, particularly with the recent spikes, some companies will go to the wall, but there are protections in place for those consumers under the follow-up process that I talked about with the noble Lord, Lord Grantchester. But of course we always keep these matters under review.

Net Zero Strategy and Heat and Buildings Strategy

Debate between Lord Callanan and Lord Whitty

Wednesday 20th October 2021 Lords Chamber

[Lord Callanan (Con)]

The decision was made by what was then the Ministry of Housing, Communities and Local Government that the future homes standard would kick in in 2025. There is a long process of consultation to go through with industry to ensure that the standard is applicable, that the supply chain is there, and so on. The right reverend Prelate will be pleased to know that we are changing what is called Part L of the building regulations next year. This will also produce substantial carbon savings in advance of the future homes standard coming in in 2025.

[Lord Whitty (Lab)]

My Lords, I thank the Minister for answering a question I asked a few weeks ago, to which he did not then really reply. I asked when the owners and landlords of buildings and housing will know whether hydrogen is to be the basis for what is currently the gas network. In one place, the document says that it will be “in” 2026, and in another it says “by” 2026. Either way, building owners have five years during which they will not know whether or not their heating systems can be transferred to hydrogen. The Minister is tonight deeply sceptical about whether we would have enough hydrogen, given its other uses, as earmarked in this document, and the need for an increased production in hydrogen for transport and industry. Can the Minister go further and indicate whether any buildings or housing will be convertible from natural gas to hydrogen, or whether some buildings in areas of industrial hydrogen use could be transferred to it? There are three scenarios, varying from nil hydrogen for home heating to it being used for something like a third of home heating by 2050. Will this mix now take place? Do we have to wait till 2026 for any sort of answer to this question?

[Lord Callanan (Con)]

I would like to give the noble Lord a direct answer: it is genuinely impossible to say, at the moment. Let me explain why. It is clear that hydrogen will play a major role in our economy. It will probably contribute to some heating, but I have given my view based on current technology. It is perfectly possible to use hydrogen for heating and gas boilers; the technology exists now—I have seen it. Two houses have been built our area—for the benefit of the right reverend Prelate—of Gateshead—which are entirely hydrogen-fuelled. They have hydrogen boilers, hydrogen hobs and hydrogen gas fires. They work perfectly well — I have cooked an egg on a hydrogen hob.

The question is where we get the hydrogen from. There are two ways of producing it: either from natural gas through carbon capture storage for blue hydrogen, or through electrolysis to produce green hydrogen. You then have to ask yourself the question: does it make sense to use green electricity to generate hydrogen to heat homes, or is it more sensible just to use electricity in the first place to heat the home through a heat pump? That is a question about thermodynamics and conversion and there will be different solutions in different places.

We can say with certainty that the future of home heating will almost certainly be taken over by three technologies: electrification through heat pumps; a greater use of heat networks, for which we have allocated funding; and a certain percentage from hydrogen. The reason we have announced our hydrogen strategy, are funding lots of research programmes and are consulting on a market mechanism to generate large amounts of hydrogen is to try to kick-start the market—to get it going and to bring in private sector investment and ingenuity. This will help to generate large amounts of hydrogen—cheaply, we hope. But we do not yet know to what extent the technology will develop, how much we will be able to produce at reasonable cost, and whether it will be suitable for use in home heating or whether it will be more sensible to use it in industrial processes. We have a multi-pronged strategy. As soon as we have more information, I will be sure to update the noble Lord.

Hydrogen Economy

Debate between Lord Callanan and Lord Whitty

Monday 19th July 2021 Lords Chamber

[Lord Callanan (Con)]

The noble Lord is quite right: it will be a considerable challenge. Meeting our 2030 ambition for 5 gigawatts of low-carbon hydrogen production will indeed require rapid and significant ramp-up. The forthcoming hydrogen strategy will ensure that the necessary regulation, policies and incentive mechanisms are put in place across the 2020s to lay the foundation for the economy that he highlights.

[Lord Whitty (Lab) [V]]

My Lords, in the absence of a hydrogen office or the proposed heat and buildings strategy, and given that so-called hydrogen-ready replacement boilers are already being marketed, is it the Government’s current view that for the majority of host households currently dependent on gas for heating, some form of hydrogen-based gas heating will be the most likely longer-term future; or will other constraints on the production of green hydrogen mean that priority is given to heavy industry and transport, so that hydrogen for heating will probably be available only in the close vicinity of hydrogen-using industrial hubs?

[Lord Callanan (Con)]

The noble Lord makes some good points, but the reality is that we do not yet know what the best make-up for heating will be further into the coming decades. It will likely be a mix of fuel pumps, hydrogen heating and heat networks.

Energy White Paper

Debate between Lord Callanan and Lord Whitty

Wednesday 16th December 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Lord asks some very pertinent questions on the back-up detail and some of the graphs provided in the White Paper. I think it would be a more productive use of the House’s time if I wrote to him with the details he requests.

[Lord Whitty (Lab) [V]]

My Lords, I welcome the fact that we now have a strategy, but, on domestic heating, how do the Government plan to engage with the 23 million households currently supplied by gas, whose boilers, appliances and radiators will need to be retrofitted in double-quick time? What is the Government’s approximate timetable for the key decisions that will be required on the development of green hydrogen production and the introduction of hydrogen-based grids?

[Lord Callanan (Con)]

Like a number of other contributors, the noble Lord points out the importance of hydrogen. It is a potential key option for decarbonising heating, but it also needs to be looked at alongside the potential for heat pumps, heat networks, et cetera. We are developing all these options simultaneously, ensuring that we have the best available option for consumers and preparing the ground for the strategic decisions on these areas that will need to be made in the mid-2020s. On hydrogen heating, as I said, we are supporting a range of research, development and testing projects designed to help determine the feasibility of using low-carbon hydrogen as an alternative to the use of natural gas for heating. However, these are long-term decisions. We will publish the heat and buildings strategy next year. If the noble Lord is a bit patient, he will see the hydrogen strategy in the new year as well.

Housing Insulation

Debate between Lord Callanan and Lord Whitty

Tuesday 25th February 2020 Lords Chamber

[Lord Callanan]

The noble Baroness makes an extremely good point. As she will be aware, the ECO scheme is funded from fuel bills. If we increase funding for the ECO scheme for poorer households, that puts up the cost of bills for all customers. That is one of the points we need to address; her point is well made.

[Lord Whitty (Lab)]

My Lords, I too welcome the Minister to his new post—and his new collaborative approach. However, he still manages to miss the point. He said that the ECO scheme was the main weapon for tackling fuel poverty, but it has failed to do that and to meet what is necessary on home heating to tackle climate change. Has the time not now come—I hope that he will raise this with the Chancellor—for the restoration of a tax-funded intervention for the nearly 4 million homes that are suffering particularly from lack of insulation and failed heating systems? This was dropped 10 years ago; it now needs to be restored.

[Lord Callanan]

I am, of course, always happy to work collaboratively with the noble Lord, but I point out gently that he is not correct to say that the ECO scheme has failed. The latest fuel poverty statistics show that the aggregate fuel poverty gap is falling year on year. We can always argue that we need to make faster progress, but the scheme is a success and it is working to bring down fuel poverty.