Renewable Energy

Lord Grantchester Excerpts

Wednesday 5th June 2019 Lords Chamber

[Lord Grantchester (Lab)]

I thank the noble Lord, Lord Cameron of Dillington, for bringing forward this debate on tidal power as we approach the anniversary of the Government’s disappointing response to the Swansea Bay tidal lagoon proposals that would have developed this new renewable technology. The Government are due to produce their energy White Paper this summer, and this debate has been a good opportunity to remind them of the potential of tidal ranges and to seek their constructive response.

The Statement a year ago repeated the message of the Government’s dismal record on renewable energy. As on previous occasions, the Government left tidal technologies on standstill for two years without dialogue or communication, while other technologies were developing, only to issue the announcement to reject the scheme. At the time, there was widespread criticism of the Government’s interpretation of the scheme. This was a pathfinder project, where value for money needs appreciation beyond a strict cost-benefit analysis of the specific scheme. As the debate has highlighted, there is now a new potential renewable technology to add to the mix of future energy sources, a first and only in class, where the UK has unique features of leadership. It could have enhanced the development of energy storage from the quasi storage feature of many tidal lagoon schemes, as well as having implications for flood management. Tidal lagoon technologies come somewhere between tidal stream and tidal range alternatives, and this location in the Severn Estuary could have been the catalyst for a developing industry, with many leading skills in the area.

What thoughts are there now concerning overlapping benefits for the steelworks nearby at Port Talbot and the wider Welsh economy? How would the planned joint venture with the German thyssenkrupp have looked if this venture had gone ahead? The Welsh Government had been prepared to put funding into the project, with the prospect of creating 2,000 new jobs, providing power to 155,000 properties, which equates to around 11% of Welsh domestic electricity consumption.

Further long-term damage to the investment community may result from the effect of the Government’s handling. Once again, the Government’s disdain for renewables will lead investors to opportunities overseas, towards projects such as the Sihwa Lake tidal power plant in South Korea. Marine renewables could go abroad, taking jobs and investment elsewhere.

With last year’s announcement, are the Government cutting the tidal range sector out of the UK’s energy future? What are the Government’s views on other projects? I was grateful to receive other engineering plans for the Severn Estuary, such as the Abberton-Minehead barrage, and last month, a glimmer of hope appeared with the alternative plans for Dragon Energy Island, mentioned by my noble friend Lord Giddens, featuring a floating island in impounded water off the coast of Swansea, with plans for modular commercial and residential buildings used primarily to generate tidal energy. It may be too soon for the Minister to be aware of the detail of this important proposal. However, the scheme could capitalise on the work and skills already present at Swansea Bay to retrieve the position following the Government’s disappointing decision last year. If the Minister has any assessment yet, it would be helpful if he could come forward with it today.

There are at least other promising signs, such as the tidal project on Merseyside. It was encouraging to see the launch of the next phase of plans to harness the tidal power of the River Mersey and Liverpool Bay earlier this month. The project could ultimately generate one gigawatt of electricity: up to four times the energy of all the wind turbines in Liverpool Bay. This would generate power for up to 1 million homes, equivalent to 500 football stadiums—a good measure of achievement on Merseyside. From designers, architects and technicians to marine contractors and construction workers, the project will create much-needed skilled jobs for the region. In leading the proposals, the city region’s mayor, Steve Rotheram, has demonstrated the exact transformational potential that devolution can produce, and the Government should provide leadership as the scheme makes further progress.

With another scheme still in its infancy, the Government must also show direction for the tidal power gateway across Morecambe Bay. The plan, similar to those already mentioned, but built as part of a road link, could create thousands of new jobs and generate energy for 2 million homes, meeting up to 7% of the north-west’s power requirement. The noble Lord, Lord Cameron, mentioned other examples, and I was interested to learn more from the noble Baroness, Lady Bloomfield.

While issuing those challenges to the Minister, I recognise that, as is the case with any new energy source, there are issues to be faced with tidal power. Any construction of tidal projects must minimise the impact on wildlife and the natural environment. Of particular significance will be the effect on distinct local estuary ecology, with impacts on migrating fish and birds that the creation of a new habitat could not mitigate. My noble friend Lord Berkeley mentioned the dangers of silting.

Of course, attention must be given to the effect on the public purse, which must be used wisely to generate maximum and widespread benefit. In the 2017 Autumn Budget, the Government set a moratorium on new low-carbon subsidies regulated by the discredited levy control framework, with the new control for low-carbon levies. This has raised concern that projects such as this and other new low-carbon energy developments could all be set at a standstill until they can proceed without any government support. Can the Minister clarify what the new control for low-carbon levies will mean for such projects, whether tidal or wave, or even other technologies such as geothermal? Will the new control persist at least until after the already committed expenditure on future CfD auctions has been made? Does the new control set the framework for the Government’s answer to the challenge of today’s debate?

This debate has laid out clear strategic benefits for the UK to develop tidal power. Within the renewables stable of technologies, it has clear advantages of regular, reliable consistency, even with the varying intermittencies as tides rise and fall. Only the Government can lead by providing support to nascent technologies and the necessary funds to fill the gaps. The UK has geographical advantages to exploit this resource, so that tidal power can contribute to and play an important role in the UK’s future energy mix—with the potential for global exports, as the noble Baroness, Lady Maddock, noted.

The Government can address that today and, in the forthcoming energy White Paper, set out clearly their intentions by introducing new policy support mechanisms for wave and tidal stream technologies and embrace the new thinking proposed by the right reverend Prelate the Bishop of Salisbury. The noble Lord, Lord Teverson, set out the challenge of meeting the new IPCC parameters and the decarbonisation targets. Against the background of the challenges to meet the fourth and fifth carbon budgets, accelerating climate change, the challenge to meet zero net carbon emissions by 2050 and diminishing biodiversity, the Government are clearly missing the target.

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

My Lords, I, too, thank the noble Lord, Lord Cameron, for introducing this debate and emphasising that what we in this country should be doing is playing to our strengths. He mentioned that, unlike a lot of other countries, we have an awful lot of tides, just as we have an awful lot of wind, and that we should certainly make use of them. I hope that I will be able to set out what we are doing, what we feel we can support and what the constraints will be in the short time available to me.

I was very pleased that, in the main, everyone—excluding the noble Baroness, Lady Maddock, and the noble Lord, Lord Grantchester—took a relatively positive line on what we were doing. I think that we have a pretty good story to tell in this country. Over the past 30 or 40 years, under a variety of different Governments, we have reduced our emissions. My colleagues and I have said on many occasions that we have reduced them by more than 40% while seeing the economy grow. We want to continue that process.

I make clear in the presence of my noble friend Lord Deben that we will be responding to his committee’s report, with its challenging targets, in due course. My noble friend and other noble Lords would not expect me to presume on my right honourable friend the Secretary of State by responding at this stage. We have been set challenging targets. We will want to make progress towards them. We will want to continue to provide leadership for the world, as mentioned by the noble Lord, Lord Grantchester, the right reverend Prelate and the noble Lord, Lord Giddens, who talked about the failings of Brazil and America to acknowledge that there is any problem at all. Again, I remind the House that we are anxious that we should get the opportunity to host COP26 next year, and support from all sides of the House would create a very positive approach.

Living where we do, we obviously want a diverse electricity system that provides homes and businesses with secure, affordable and clean power. However—we keep coming back to this—we want that power at a cost that is both acceptable and supports continued growth. On many occasions, noble Lords have talked about the fact that costs come down. We have seen that with wind, solar and tidal; I am grateful to the noble Lord, Lord Berkeley, for his comments there.

There is some doubt about whether one will see costs come down in quite the same way for a technology that is not exactly new and, as the noble Lord reminded us, is largely about pumping a lot of concrete and rock into the ground; after all, concrete is not the most carbon-friendly material. One cannot see technology reducing costs there in the same way as it has done for wind and solar. Again, as the noble Lord, Lord Cameron, said, we must play to our strengths; we will do so for wind because we are a very windy spot. To do that, we obviously need to continue to bring down the costs of all forms of low-carbon generation; I am grateful to my noble friend Lady Bloomfield for mentioning how many there are. As the noble Lord, Lord Teverson, said, we have not seen the same cost reduction in areas such as nuclear as we are seeing with solar and wind.

I have some criticism of the noble Baroness, Lady Maddock, for taking a rather negative approach to what the Government are and have been doing. We are investing a great deal of public funds—some £900 million—in innovation, including a further £177 million to reduce further the cost of renewables and up to £100 million in leading-edge carbon capture and storage and industrial innovation. That is to drive down the costs there and, as I said, we have seen remarkable cost reductions over the year. We have seen low-carbon generation rise from 54% in the third quarter of 2017 to a record high of 56% in the third quarter of 2018, due to that increased renewables generation.

It has been a record-breaking year. I will give noble Lords some figures, although I will probably be able to give even better ones in a few weeks’ time. We have gone a whole fortnight without any coal-fired generation, which we aim to get rid of. This is in a country where, some 70 years ago, a Labour politician said:

“This island is made mainly of coal and surrounded by fish”.


Anyway, we are getting rid of the use of coal to generate electricity; as I said, we have just gone another fortnight without using any. Last year, there were nearly 1,800 coal-free hours over 10 weeks in total—so we are making progress.

I will deal with one or two individual issues. Since all noble Lords mentioned Swansea Bay, it is right that I address both that and the programme for six tidal lagoons proposed by Tidal Lagoon Power Ltd. I repeated the Statement made by my right honourable friend in another place on costs. We made it quite clear that the costs of that particular programme did not meet our requirements for value for money. I appreciate that the noble Lord, Lord Giddens, had some queries about that, as did other noble Lords, but we published a summary of our value for money analysis. The figures were clear; even the developer himself conceded that the project required a CFD strike price three times that of onshore wind.

Further, that issue was looked at by both the Welsh Affairs Select Committee and the BEIS Select Committee, which published details of the additional requests from the Swansea Bay developers over and above a 35-year CFD at £92.50 per megawatt hour. It was expensive. That fact was echoed by the National Infrastructure Commission in its national infrastructure assessment, published last July, which stated that,

“tidal lagoon power will remain an expensive technology in the future. The extra benefits which arise from its predictability are not enough to offset its higher capital costs. And it will never be a large-scale solution: an entire fleet of tidal lagoons would only meet up to 10 per cent of current electricity demand in the UK”.

I appreciate that other tidal projects are being looked at. For example, the Mersey and the Solway—in my part of the world—were mentioned. Officials and Ministers in the department have had several meetings with those promoting such things. We will continue to hold meetings and talk to developers. For example, the Solway Firth tidal lagoon project is at much too early a stage of development: to date, the engineering details have not been finalised and the developers have not yet applied for the consents and licences that would be required to develop the site. Obviously, we will continue to look at that project, take an interest and make a decision in due course on whether the project is good.

As the noble Lord, Lord Grantchester, mentioned, it is important to take environmental considerations into account, but there has been no detailed monitoring at this stage. For example, no seabed surveys have been undertaken on the sites; I am thinking in particular of the one in the Solway. So at this stage we must proceed carefully before going further.

Other noble Lords, of which the noble Lord, Lord Cameron, was the first, mentioned the possibility of tidal stream energy. Again, that should be looked at. The Government have provided long-standing and targeted support for the development of both wave and tidal stream energy. Since 2003, we have provided £175 million of innovation funding in the wave and tidal sectors; we have provided almost £80 million of that since 2010.

That has supported many firsts, including the wold’s first megawatt-scale tidal stream turbine, SeaGen, which was deployed in Strangford Lough in 2008. There has been much mention of Orkney, including by the noble Lord, Lord Berkeley, and the noble Baroness, Lady Maddock. I visited Orkney last year and met her colleague, Alistair Carmichael, and saw some projects that are being tried out there, with government money going into them. The world’s first pre-commercial array, the 6 megawatt MeyGen project off Caithness, received £10 million from BEIS innovation funding and is supported under the renewables scheme.

There have been some successful small-scale tidal stream tests over recent years. They are still at an early stage of development but they might be at the point where, as with wind, the price could come down—although I suspect that, for some of the bigger tidal barrages, the prospects are possibly less good. However, it must still be viewed in the context of the falling costs of other forms of low-carbon generation such as offshore wind. At the moment, their costs are five times that of offshore wind. I assure noble Lords that officials, Ministers and my right honourable friend Claire Perry will continue to engage with the sector to better understand its cost-reduction potential.

Finally, I reiterate that we will publish the energy White Paper in the summer, which will build on my right honourable friend’s strategy address in November of last year, setting out four guiding principles for electricity policy and addressing the challenges arising from the radical transformation of the energy system over the coming decades. It will take a long-term view of the energy system, out to 2050, and show just how we can deliver our climate change goals and the aims of the industrial strategy. At that point, or sooner, I hope that my right honourable friend will be able to respond to my noble friend Lord Deben and his climate change committee report.

I appreciate that my time is up. I hope that I have given a partially positive view of what the Government can do. There will be more we can do and further developments in all forms of renewable energy. Tidal may be part of that, and all forms of tidal—whether by barrage or otherwise—will be looked at.

[Lord Grantchester]

I appreciate that the Minister is under tight time constraints, but as the energy White Paper approaches, could he give us a detailed answer on how the control of low-carbon levies will operate?

[Lord Henley]

The noble Lord will have to be patient and wait for the White Paper. No doubt we will respond and he will have an answer in due course.