Gas-fired Power Stations

Lord Hannan of Kingsclere Excerpts

Thursday 14th March 2024 Lords Chamber

[Lord Callanan (Con)]

The noble Lord is right in that the number of larger generators on the system is falling, with the elimination later this year of coal generation —we will have phased it out completely. He is right, again, that the gas generators that we are talking about—which will be some refurbished existing plants, but also a few new ones—will be able to take part in the capacity market auctions. These are essentially auctions for back-up capacity that may be required in certain scenarios.

[Lord Hannan of Kingsclere (Con)]

My Lords, I wonder if my noble friend the Minister can enlarge slightly on the question posed to him by the noble Baroness on the Labour Front Bench about hydrogen adaptation. I very much welcome the Statement; it seems to me important to tackle this issue in the proportionate, affordable and measured way, rather than in a millenarian spirit. Can my noble friend the Minister outline a little bit of what the Government’s hydrogen strategy is as part of that solution?

[Lord Callanan (Con)]

I thank my noble friend for the question; I am very happy to do that. We are progressing a very advanced hydrogen strategy, which I will try to summarise in a few words. We let the first 11 electrolytic hydrogen contracts before Christmas, offering £2.1 billion-worth of long-term support for the development of electrolytic hydrogen. We have a few blue hydrogen projects that are currently taking part in the CCUS negotiations. We are currently putting in place business models for a transportation and storage system and hope to progress that later this year, as well as the first couple of storage projects. We have a very ambitious hydrogen project; we think that hydrogen has a very important role to play in the net-zero scenario, both in terms of long-term energy storage and in decarbonising some elements of industry that are particularly hard to decarbonise. We should of course electrify where we can, but we will still need hydrogen power to generate power in some of those sectors.