Energy Prices: Electricity Bills

Lord Grantchester Excerpts

Wednesday 13th October 2021 Lords Chamber

[Lord Callanan (Con)]

The noble Lord makes an extremely good point. We remain very concerned about the impact of Nord Stream 2 on European energy security and particularly on the interests of Ukraine. We will continue to raise our significant concerns about the project, defend the interests of Ukraine, support future arrangements and give a significant transit role to them.

[Lord Grantchester (Lab)]

My Lords, Labour will make Brexit work. Can the Minister confirm that he believes that the measures of support are sufficient this winter to help those in fuel-poor households and those with poorly insulated homes?

[Lord Callanan (Con)]

We always keep these things under review, but I outlined the many steps that we are taking and if necessary, we will look further at what we can do to help.

Emissions Trading Scheme: Transport

Lord Grantchester Excerpts

Monday 11th October 2021 Lords Chamber

[Lord Callanan (Con)]

I am sure the Chancellor will want to update Parliament in due course on any proposed levies.

[Lord Grantchester (Lab)]

Clearly the Government have not thought through the present crisis. So often it is the poorest throughout the world who bear the brunt of climate change. How will the Government apportion costs for the UK ETS to cover all forms of transport?

[Lord Callanan (Con)]

The effect on poor people, including in the UK, will be one of the factors that we will need to consider when expanding the ETS. These are important fiscal measures. We will need to look at them properly and consider all the implications, and we will set out our thinking in due course.

Net-zero Carbon Emissions: Behaviour Change

Lord Grantchester Excerpts

Thursday 16th September 2021 Lords Chamber

[Lord Grantchester (Lab)]

Once again, this has been a very interesting and stimulating debate with many notable contributions right across the House. Overall, there has been repeated recognition that the achievement of net zero can be accomplished only if it is accompanied by the public embracing behaviour change in their everyday lives. Certainly, the necessity for action is ever more widely recognised and expressed through the ever more frequent reporting of extraordinary weather events all around the globe.

My noble friend Lady Blackstone introduced the debate by setting out the case for a centrally led strategy for engagement in facilitating behaviour change. Many contributions have drawn attention to the many reports from leading agencies. The International Energy Agency has said that behaviour change plays a role in almost two-thirds of emission reductions. The Energy Research Partnership points out that, with motivation through multiple channels, interventions will be required through education, incentives and affordable low-carbon alternatives to change deep-seated habits that become embedded as societal norms. There is no question that the British people, especially our developing young people, are alarmed by the climate crisis and wish to engage.

The Covid-19 pandemic has proved that decisive intervention by the Government, local authorities and agencies can achieve significant shifts in behaviour. By comparison to the pandemic, the effects of climate change have still largely to be felt to affect most people’s daily lives. Behaviour change to embrace a net-zero lifestyle will require a cultural revolution of information-driven decision-making; visible peer pressure equal to the effect experienced following the smoking ban; and strong, coherent government policies across all departments and services.

Various Climate Change Committee reports and commissions from research bodies and universities indicate that more than 40% of the abatement necessary involves some degree of consumer change, through their choices, to reduce demand and improve efficiencies. Many examples have been promoted today. The right reverend Prelate the Bishop of Blackburn is right in his analysis that people want to feel part of the solution and not the problem. The noble Baroness, Lady Jones, has identified mixed messages and confusing price signals, which can only bring delay and frustration with unintended consequences. The noble Baroness, Lady Sheehan, spoke of the unco-ordinated right and left hands of government, with its encouragement and subsidy of fossil fuels. Indeed, all of us send signals through our own consumption patterns, as expressed correctly by the noble Lord, Lord Kirkhope. For every pull forward, there arises a push back from another interest lobby.

Perhaps the hardest behavioural change to achieve is that of government itself. The biggest challenge no longer comes from climate deniers; it comes from climate dither and delay. It comes from a scattergun list of points in a plan, instead of a comprehensive set of strategies that sets out all the Government’s policies in a coherent framework. The Minister may claim to have undertaken to address quite a few of these acknowledged gaps, which I respect, from the difficult hydrogen strategy, published in the Recess, to the critically important decarbonisation of transport plan. However, the acceleration of climate change underlines every week the urgency of this decisive decade for change. With five weeks remaining before the opening of COP 26, the Government have yet to publish the equally important heat and buildings strategy, the Treasury’s finance plan and, most critically, the net-zero strategy, where the Minister identified in June that the Government would communicate their approach to public engagement and support the public to make green choices. The Public Accounts Committee identified that the Government have

“no coordinated … messaging about the changes and choices people will need to make”

and identified many critical areas where they needed to engage, from central governance to local authorities, to communicate effectively. The Government need to switch from targets without delivery and rhetoric without the reality that faces households and families in their everyday activity.

The Government can now be congratulated that, in 2019, they finally recognised that international aviation and shipping need to be included in the UK’s net-zero calculations. However, transport remains the biggest source of emissions where the least progress has been made across the country and the most attention by the wider public is needed. The Government have pulled forward the phase-out date for new diesel and petrol cars to 2030 and, in support, the Climate Change Committee has identified that 48% of cars sold by 2025 should be electric vehicles. However, we are currently way off that. In their decarbonisation of transport strategy, the Government reported that less than 15% of cars sold in July this year were EVs. The biggest challenge and barrier to change for an eager population comes from affordability and lack of infrastructure. The CMA has expressed concern about the unequal and patchy rollout of charge points. Policy needs to recognise these barriers, identify enablers and target interventions accordingly, such as tiered vehicle scrappage schemes weighted in favour of essential car users and the lower-paid. Behaviour change modelling needs to become embedded in departmental procedures and policies. What plans do the Government have to meet the issue of affordability to increase the uptake of EVs?

The need for as yet nascent technologies, such as hydrogen, has also been identified as essential for public transport such as buses and trains, and indeed aviation, and is already part of government plans. Hydrogen as a fuel also has applications to the decarbonisation of gas, with a link across to another key area of everyday life, the nation’s housing stock. As working from home has become a clear behavioural change for so many, the opportunity must not be lost from the many aspects of changing work patterns. As far back as 2018, the National Infrastructure Commission identified energy efficiency as a clear imperative in reducing demand and improving homes. It is easily said but, as many Administrations have identified, so difficult to attain. The green homes grant scheme, supposedly so obvious yet rushed in with limited finance and hopelessly short timetables, was doomed to failure. The National Audit Office revealed last week that just 20% of the inadequate £1.5 billion was spent. The total spend on home improvements is anticipated to be £314 million, but with a massive £50.5 million spent on administration. What lessons will the Government draw from this sorry experience? How do they propose to recalibrate their plans for home improvements, and will these be incorporated into and announced along with the heat and buildings strategy?

I have mentioned the hydrogen strategy as vital in the urgency to decarbonise gas in the heating of homes, where progressive regionalised introduction has been identified as the best transitional approach. In setting future dates for the compulsory introduction of hydrogen-ready boilers for all new installations, perhaps the pricing disadvantage inherent in this new option is a key area to be addressed. Will the Minister raise the public’s awareness of the urgency of this transition by mandating all quotations for new boilers to include the hydrogen-ready option alongside the conventional replacement cost?

The alternative of heat pumps is also identified as being more costly than conventional choices. The Government will need clearly to recognise that cost barriers remain high in the public’s mind when embracing renewables and sustainable long-term solutions. The rising cost of energy for this winter and the disruption of the interconnectors from France have received wide- spread notice. The noble Lord, Lord Oates, mentioned the finance industry. With interest rates on mortgages having fallen back to less than 1%, the cost of the net-zero challenge needs to meet this competitive threshold. Does the Minister expect the Treasury’s net-zero finance plans to be ready for COP 26 or more likely to be delayed until the autumn Statement?

The challenges to be faced remain substantive, yet everything is impossible until it happens. Can the Minister give the House an update on the Government’s objective to announce international investment commitments totalling £100 billion per year from developed countries at COP 26? Can he report a successful response from the US, and is China included in this designation? These two nations remain the biggest sources of climate change emissions. What investment in this fund is planned by the United Kingdom Government and how will it be spent, and with what priorities? This initiative would set a serious benchmark towards world- wide progress.

Ecodesign for Energy-Related Products and Energy Information (Lighting Products) Regulations 2021

Lord Grantchester Excerpts

Tuesday 14th September 2021 Grand Committee

[Baroness Ritchie of Downpatrick (Non-Afl)]

I thank the Minister for his explanation of these regulations. This is my first time in a statutory instrument debate actually in the Moses Room because I always used Zoom over the last 15 months; notwithstanding that, I am very pleased to see everybody in the flesh.

I have certain questions. I am not opposed to these regulations or what they contain because I firmly believe in striving for climate change mitigation and for energy efficiency, which would help mitigate costs for the consumer. However, in that regard I have some questions and I hope the Minister might be able to provide me with answers. Does the new labelling scale indicate levels of greater safety? I do not think there is an indication of that. Who will monitor the safety of all these lighting appliances? Will there be reports on carbon reduction in relation to these lighting products to COP 26 in Glasgow in a couple of months’ time? Will Parliament receive an ongoing annual report about achieving zero targets in relation to lighting products?

I would be most grateful if the Minister could clarify whether there is any difference between what currently exists and what will exist under these new labelling arrangements. I would also like to ask the Minister what training will be provided to suppliers in terms of the new energy labels. I always fear that, when new labelling comes into play, a cost to the suppliers and those involved in the construction will be attached. I hope that the reduction in energy bills will not result in an increase, or no reduction, because of the costs that will be involved in the manufacture of these new labels. Could the Minister provide me with some detail on that? Will funding support be provided to small suppliers, because they will not have the type of financial outlay that bigger suppliers will?

Apart from flag designations, what other technical differences could exist? Could the Minister advise on that? Will electrical products conform to energy efficiency and climate change mitigation requirements? How will all this assist business development?

I notice that two of the regulations refer to the Northern Ireland protocol. I am glad to note that these are not areas where the contention will apply and that, generally, for these goods and services, there have been no impediments and there will not, we hope, be any. Could the Minister indicate whether he has received specific representations or overtures in relation to the application of the protocol? I note that these regulations apply to England, Scotland and Wales; I therefore assume that the Department for the Economy in Northern Ireland will have responsibility for lighting appliances from the Northern Ireland protocol perspective.

I look forward to the Minister’s answers on this welcome piece of legislation.

[Lord Grantchester (Lab)]

I thank the Minister for his introduction to the two instruments before the Committee today. I am very happy to approve them; I agree that both are uncontroversial as well as sensible and obvious. Energy efficiency continues to be vital in reducing carbon and cost, while we all agree that high cross-border standards should continue to advance in tandem in order to lower barriers to trade. All this helps drive changes in consumer choice towards better products, innovation and improvements.

With the United Kingdom no longer a member state of the EU, it continues to make best sense to maintain improvements in step together across Britain, the United Kingdom and the EU. Can the Minister confirm that that will remain the Government’s intention for the future?

These regulations reflect similar approaches and outcomes. The Committee debated a related instrument at the beginning of June, covering labelling, online and internet selling and welding equipment. Today’s two instruments relate to servers, data-storage products, electronic displays and household products such as washing machines, dishwashers and refrigerators on the one hand and light sources and separate control gears on the other. Both Explanatory Memorandums were exemplary and reflected close dialogue with industry, businesses and associations, which underpins successful regulation and will bring confidence to the public in their engagement.

The energy labelling consultation across four weeks in March and April could be regarded as straightforward in that only three responses were forthcoming, so no guidance is envisaged. However, can the Minister be confident that business will be aware of these changes and how does the department envisage further dissemination of information for the measures to be fully operable from 1 October this year? Can the Minister provide any further details regarding the provisions and improved accuracy of the regulations highlighted under paragraph 10.3 of the memorandum, following input from these three consultees?

--- Later in debate ---

[Lord Callanan (Con)]

My Lords, I thank the noble Baroness, Lady Ritchie, and the noble Lord, Lord Grantchester, for their contributions to this debate.

As I have said before, the Government are committed to delivering on their carbon budgets and net-zero target. The lighting products regulations will make a modest contribution to achieving those targets by setting higher product standards. I will reiterate the figures for the benefit of the noble Lord, Lord Grantchester: 1.8 megatonnes of carbon savings will be made in the UK by 2030, which will increase to 2.6 megatonnes of carbon dioxide by 2050. The amending regulations will help to achieve this by safeguarding the carbon savings that will be secured from our retained EU law.

On the questions posed to me by the noble Baroness, Lady Ritchie, on product safety, which of course is not part of these regulations, the Office for Product Safety and Standards enforces ecodesign and energy labelling requirements placed on manufacturers and importers across the UK. Trading Standards and the Department for the Economy enforce energy labelling requirements placed on retailers in Great Britain and Northern Ireland respectively. The Advertising Standards Authority is responsible for ensuring that marketers’ advertising of energy labelling across various forms of media is in accordance with UK advertising codes. All market surveillance authorities work hard to uphold high product standards on the UK market and to ensure that businesses are supported to understand their obligations.

I can also tell the noble Baroness that there are currently no plans to report on the specific carbon-saving reductions from these regulations, but of course the Government will update Parliament on their carbon-saving targets on a more aggregate level. She also asked about differences between old and new requirements. The main difference introduced by these new energy-labelling requirements is the reinterpretation or reintroduction of the simple A to G scale. Many products under the previous regulations achieved A+ or A++ ratings, so the new scale has been reorientated to make them more understandable for consumers and enable consumers to better discern the most energy-efficient products. This would also encourage innovation by manufacturers to achieve the highest rating. We know that industry is already innovating to meet the highest levels of energy efficiency from lighting products, and we are working with it to understand how these technologies can go further to save even more energy, reduce carbon and of course, at the same time, reduce consumer bills.

On the noble Baroness’s questions about support to businesses, we expect the new requirements to have very limited impact on small businesses. Nevertheless, we have ensured that we work closely with suppliers of the affected products to help them understand the new requirements, and we have liaised closely with trade associations, which play a vital role in providing guidance to small and medium-sized businesses. Despite the new regulations creating some small new costs to manufacturers in the short term, they will in the longer term save businesses and consumers money on their energy bills. We estimate a net saving of something like £18 million a year for businesses up to 2050, due to their reduced energy bills. It is also important to emphasise that no products are being taken off the market; if they are currently on the market, you can sell out supplies of existing products before you need to move on to the newer ones, so nothing will be scrapped and nothing wasted.

With regard to working together with the noble Baroness’s home Province of Northern Ireland in relation to implementation of energy labelling, we work closely with officials in the Northern Ireland Executive to ensure that they are aware of the new requirements, including in relation to enforcement of these regulations on retailers, which, as I said, is the responsibility of the Department for the Economy in Northern Ireland. The OPSS enforces requirements on suppliers across the UK and has an excellent relationship with stakeholders in Northern Ireland.

I move on to the questions from the noble Lord, Lord Grantchester, who asked about awareness of the new regulations. The noble Lord can be assured that we have engaged extensively with the lighting industry to communicate the changes to the regulations, and we have provided guidance and support to manufacturers that have taken the trouble to contact us directly. The OPSS has also communicated widely to remind businesses of the new regulations coming into force.

On light pollution, ecodesign and energy labelling have played an important role in contributing to reducing UK emissions, and we believe that additional savings through better policy could make an important contribution to the Government’s carbon budget targets and to net zero. We are always exploring whether further energy savings could be made by using light products in smarter ways, which would help to contribute to an aim that we all share—that of reducing excess light pollution. The noble Lord can be assured that we will work closely with our colleagues in the Department for Environment, Food and Rural Affairs to see what more can be done with using smart lighting products and so on to reduce light pollution.

To close, I underline once more that the main purpose of these regulations is to raise the minimum energy efficiency of a range of lighting products sold in Great Britain and to reform energy labels for lighting products by rescaling the energy classes and introducing an energy scale. Both SIs will help to avoid technical barriers to trade, while also bringing significant benefits to consumers in the form of reduced energy bills and to the environment in terms of lower emissions. With that, I commend these regulations to the House.

[Lord Grantchester (Lab)]

May I just delay the Committee for one short moment and thank the Minister for clarifying those figures on the savings from the lighting regulations? However, could he perhaps write to me with wider details of what the power generated is in a more total setting of the lighting industry, and what percentage these savings should represent against that total?

[Lord Callanan (Con)]

Of course, I would be very happy to write to the noble Lord with that information.

Climate Change

Lord Grantchester Excerpts

Tuesday 7th September 2021 Lords Chamber

[Lord Callanan (Con)]

Yes, our assessment is that it is still possible by the end of the century, but only with immediate and significant reductions in global emissions over the next decade and net zero by around 2050. It would be a challenge, but given concerted action across the world, we could still do it.

[Lord Grantchester (Lab)]

The IPCC report underlines the statistical proof of man’s footprint across the globe and that climate breakdown is already well under way and accelerating, with ocean acidification and glacier meltdown baked in for centuries to come. Does the Minister agree that the biggest threat that the world now faces is not climate denial but climate dither and delay? Will the Government now revise their NDC pledge to cut carbon emissions, on which my noble friend Lady Young sought clarification, and bring forward a more ambitious programme for action before COP 26?

[Lord Callanan (Con)]

As I said in response to a previous question, I admire the ambition of the noble Lord and his noble friend, but we have already achieved more than the vast majority of countries in the world. We have one of the most ambitious policies and one of the most ambitious reduction targets. We have made some of the fastest progress among all the G7 countries. Of course, it is right for the Opposition to keep pushing us to go further and faster, but we have done a lot.

Net Zero Test

Lord Grantchester Excerpts

Thursday 22nd July 2021 Lords Chamber

[Lord Callanan (Con)]

Planning of course is extremely important, particularly in terms of delivering net-zero buildings. The noble Lord will be aware of the proposals we have to modify building regulations to reduce the impact of new buildings.

[Lord Grantchester (Lab) [V]]

This is the decisive decade for action and achievements, yet behind the Government’s scatter-gun rhetoric there is only dither and delay to key strategic coherency: the net-zero strategy, the hydrogen strategy, the Treasury’s finance road map, and others. Can the Minister confirm reports that another key strategy document, the heat and buildings strategy, is further delayed? According to Sky,

“Whitehall negotiations are stuck over how best to incentivise the public to change to low-carbon alternatives”.

How will the different strategies combine to support the UK’s climate change goals on both net zero and adaptation, along with wider environment-related goals?

[Lord Callanan (Con)]

The heat and buildings strategy will be published in due course. I do not agree with the noble Lord that we are not doing anything. I refer him to action we have taken recently: the energy White Paper, the revised emissions trading system, all of the announcements and investment to do with offshore wind, the pledge to phase out new petrol and diesel vehicles, the transport decarbonisation plan, and so on. Of course, there is always more to do, but I do not accept the noble Lord’s premise.

Electricity Capacity (Amendment) Regulations 2021

Lord Grantchester Excerpts

Wednesday 21st July 2021 Grand Committee

[Lord Grantchester (Lab) [V]]

I am grateful to the Minister for his introduction to the regulations before the Committee today. He looks a little isolated in the Committee Room today, but I hope our words will buoy him up. We are conducting very successful deliberations today. As he remarked, these regulations are non-contentious and provide sensible revisions to strict interpretations to the letter of the previous regulations by the capacity market delivery body. I agree that the three amendments will enable a better dialogue between capacity providers and the body to enable corrections of non-material errors in pre-qualification applications to enable secondary trades to be better maintained and to enable appeals to be heard to extend compliance periods or withdraw reduction decisions. All these should enable a more competitive capacity market to operate, so I am content to approve the regulations today.

Although they are uncontentious, I must comment that I found the Explanatory Memorandum rather scant. While I note from paragraph 15.3 that the Explanatory Memorandum meets the required standards, which I am sure will have been set and agreed with your Lordships’ Secondary Legislation Scrutiny Committee, nevertheless it would have been helpful to me if the memorandum had offered an overview of the main pertinent elements of the consultation respondents’ comments. I realise that the Minister will reply that further information can be gathered through the link to the consultation document and the Government’s response, but some indication of which minor amendments were put forward that have been taken into account where sensible would have given better assurance that respondents were broadly supportive of the proposals. Indeed, the noble Baroness, Lady Bowles, spoke about consultation and its importance with interpretation.

Furthermore, at paragraph 6.2 the Capacity Market (Amendment) Rules 2021 are specifically mentioned as additional to these regulations, but without explanation. The Minister said a little about the background details to that in his opening remarks, and I am grateful to him for that.

Having made these remarks, I merely add that the capacity market has worked well in bringing forward investments and innovations necessary to the electricity market reforms that are now appearing more and more to be merely providing free money to provide generation that either will not be called on or would be provided in any case, should there be a need. The most obvious example of this is nuclear power, where a plant is not subject to being switched on and off. Does the Minister consider this an issue, or does he believe that the price mechanisms adjust to this situation? Certainly, the initial operation of the capacity market has contended with and avoided the potentially huge volatility of price movements should various future energy needs predictions of marginal shortages have proved accurate. As we know, the cut-backs consequential to the Government’s austerity programme meant that there was no danger of the lights going out.

As the next review considerations begin to arise, can the Minister confirm that a full appreciation of the capacity market mechanisms to meet potential powers shortages will be part of that review and that it will not be limited to focusing merely on technical, operational measures? Will the review undertake more fundamental appraisals, such as considerations to replace the capacity market mechanisms with alternatives, such as strategic reserve capacity?

[The Deputy Chairman of Committees (Baroness Finlay of Llandaff) (CB)]

I now call the noble Lord, Lord Bradshaw. I will try one more time, before turning to the Minister, to call the noble Lord, Lord Bradshaw. As we are unable to reach the noble Lord, Lord Bradshaw, I now call the Minister to respond.

Hydrogen Economy

Lord Grantchester Excerpts

Monday 19th July 2021 Lords Chamber

[Lord Callanan (Con)]

My noble friend asks her question at an excellent time, because I visited a demonstration hydrogen home last Thursday and, despite some scepticism from the Opposition Benches, I was able to cook an egg using a hydrogen hob, and I confirm that the person who ate it has so far survived satisfactorily.

[Lord Grantchester (Lab) [V]]

Can the Minister confirm whether the promised hydrogen strategy will include support for the steel sector to enable a long-term shared vision to develop between industry and government on the pathway to net zero?

[Lord Callanan (Con)]

The noble Lord makes a good point, in that low-carbon steel production will be one of the areas that we will need to look at. Hydrogen is one of the fuels that could offer us an option in that area, alongside others. All of those matters will be addressed in the hydrogen strategy.

Steel Sector

Lord Grantchester Excerpts

Monday 12th July 2021 Lords Chamber

[Lord Callanan (Con)]

We are working hard to make sure that UK producers of steel have the best possible chances of competing for and winning contracts across all government procurement efforts. The joint industry-BEIS Steel Procurement Taskforce, launched on 12 March, shows our willingness to support the sector and aims to work with it to promote the unique selling points of UK steel.

[Lord Grantchester (Lab) [V]]

The Government’s recent U-turn to bring forward emergency legislation to extend steel safeguard tariffs is good news, but this goes back to 2017, when the House first debated the Trade Bill. It is a mess of the Government’s own making. Can the Minister explain how the Trade Remedies Authority will be urgently reformed to prevent more anguish and uncertainty for the steel sector as well as for other businesses and industries?

[Lord Callanan (Con)]

I am pleased that the noble Lord welcomed the decision that was taken with regard to the recommendations of the Trade Remedies Authority. Of course, we keep all these matters under constant review but, as I said, we will continue to work with the sector to see what new opportunities there are and how we can help it in future.

Private Sector: Environment and COP 26

Lord Grantchester Excerpts

Wednesday 7th July 2021 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness makes a good point. We keep all these matters under constant review. We are constantly looking at the corporate governance code and we are reforming audit and corporate governance at the moment. We will be announcing some plans when the consultation has closed.

[Lord Grantchester (Lab)]

In June, the Government announced that Microsoft would join SSE, Scottish Power, NatWest Group, National Grid, Sky, Sainsbury’s, Hitachi, Reckitt and GSK as principal partners for COP 26. Can the Minister explain the Government’s criteria for appointing the principal partners? Does this mean that they consider these companies to have clear plans for achieving net zero which are being implemented with a company-determined contribution?

[Lord Callanan (Con)]

All companies that take part in COP 26 will have joined our race to net-zero initiative. As I mentioned in response to the noble Lord, Lord McConnell, 40 of the FTSE 100 companies have already joined it and we hope that more will follow.