Great British Energy Bill

Lord Howell of Guildford Excerpts

Report stage
Tuesday 11th February 2025 Lords Chamber

[Baroness Boycott (CB)]

My Lords, I will speak to Amendments 13 and 44 in this group. I thank the noble Baroness, Lady Young, and the noble Lord, Lord Randall of Uxbridge, for supporting Amendment 13, which is very straightforward. Very simply, it would exclude biomass from the things that GB Energy can invest in. Amendment 44 is drafted very tightly and makes the assumption that biomass will still be included, but then asks: will the Government report on the perceived carbon neutrality of that biomass, the percentage of power it will provide to the grid and the overall impact of it on achieving our domestic and international climate targets, particularly our nature targets?

I wanted to bring these back today as I did not feel like the Minister’s response in Committee addressed the issue. But it would be entirely remiss of me not to take the opportunity to say well done to the Government on what they have said about the future regime of Drax. I wondered whether the noble Lord, Lord Hamilton, had picked up on this. It came out yesterday and is a big move on behalf of the Government to start to rely much less on Drax and to really try to clamp down on all the things he was talking about, such as importing old wood from Canada and the sense that we just cut up wood in the Pacific and ship it all the way here. The Government have gone a really long way and I am really grateful, because I and a lot of people have banged on about Drax now for a very long time. It is terrifically encouraging to see that the phase-out of this type of power is on the cards as we build up all the others. From my point of view, it does not mean that all biomass is okay; I think it is a very dodgy source of fuel.

I noted, in a report by E3G last month, that the clean power mission could be delivered without extending the lifetime of Drax, so perhaps the Minister can tell us how far they have considered this as an option and what options were considered. I have a few specific questions. Bioenergy is costly and, as I said before, has a great impact on nature and land use, and particularly on what we will have for food production. I know there are lots of things such as miscanthus that you do not have to replant, but you are still using up some really good agricultural land. Is this a good use of the money we are going to invest in GBE?

Can the Minister confirm that Drax will not be allowed to burn wood from primary forests for any of its generation? I am so pleased with the work that has been done, but I would like some confirmation that we can all listen to. On the issue of transparency, can he commit to his department publishing whatever research, analysis or investigation it has done before arriving at the decisions it has today? When I asked a Written Question on this recently, the substantive point was not answered.

As many people who care about this have seen, “Dispatches”, Private Eye, “Panorama” and even an Ofgem investigation have found that all the biomass energy generators in the UK have misreported data. This is endemic—it is continual. Along with several other noble Lords, I wrote to the FCA last week about some of these allegations, which contradict Drax’s annual report. So, while I appreciate the announcement, I would like to know what measures the Government are taking to tackle this issue. The operators—or at least one—cannot be trusted to mark their own homework, and the regulator has thus far failed to be completely on top of it. I know that we are tightening all the regulations, but is the Minister confident that his department will be able to deliver what has been asked for, because what has been asked for is a terrific step forward.

While the Government have let the door open for BECCS in the future, we need to be honest about the fact that we do not know whether it will work at the scale that is needed. It was very interesting to hear the outline of the earlier amendments in this group, with the extreme positivity about what carbon capture and storage will be, and I look forward to hearing more about it. However, at the moment it is taking out very little carbon from the atmosphere and, in all the future carbon budgets, it plays a very big role in us getting to net zero. Many people are anxious about whether this will be deliverable, and on what timescale.

[Lord Howell of Guildford (Con)]

My Lords, the speech of the noble Baroness, Lady Liddell, was music to my ears. This really is the missing prince at the ball—the missing element in the whole strategy of reducing emissions in order to curb the violence of climate change, which, after all, is the main purpose of all our endeavours. It is not a secondary purpose, it is the main purpose, and of course it is failing. Emissions are continuing to rise worldwide and the forecasts are very gloomy that they will rise still further. Our own performance has been good in contrast, as one tiny bit of the jigsaw, but overall the aim of reducing emissions is not succeeding. Carbon capture, usage and storage is an area where vast improvements can be made, with real effort to store emissions, such that we no longer have to watch those gloomy monthly or three-monthly figures detailing rising emissions worldwide again and again.

Furthermore, it is admitted, quietly—I think I have heard NESO and other experts say it openly—that carbon capture and storage is an essential part of the 2030 story. Because we have delayed so much—all parties are to blame—and we have not got on with nuclear, which we have allowed to shrink because we dithered on various other technologies, there has been very little advance on carbon capture and storage, but we know that in order to achieve decarbonised electricity by 2030—I think we are talking about the present electricity output, which is one-fifth of our total energy storage, not the whole of an electrified economy—we will need, in order to prevent outages, further gas-generated power. That is not proclaimed very loudly; CGN plants are being contracted for, designed and built to make it possible for there to be reliable and, we hope, affordable energy in 2030, even though it is substantially decarbonised.

That will require an output of carbon of considerable size, which will have to be captured and stored, otherwise the system will not work. The 2030 target is literally unobtainable, unless we have an elaborate expansion of carbon capture and storage for gas-generated electricity, which is an essential part of the pattern for 2030, as it probably is for 2040 and 2050 as well. Domestically, this is a central issue, yet it is hardly mentioned in this discussion or in the Bill.

That is not all; worldwide, the one contribution that this nation could really make through its brilliant technology is in developing cheaper versions of carbon capture and storage. All over Asia, there are coal-driven electric plants belching carbon and smoke, and more are being built at the moment. China has achieved amazing things in reducing its coal-based electricity from 1,900 gigawatts a year down to about 1,000 gigawatts. As we now produce no electricity from coal, which is rather amazing, that is an infinite number of times the amount that we produce. China is down to 1,000 gigawatts, but that is still a vast addition every year and every day—it is producing much more than we do in a year in emissions of carbon dioxide and methane as well.

To deal with the world’s problem, carbon capture and storage is essential, capturing not only carbon emitted when generated from fossil fuels but carbon direct from the atmosphere. Some major projects are being developed around the world on that scale. All these are essential projects to achieve the main aim, which is to lower emissions. If that is the main aim then Great British Energy should surely have a serious role in it.

We should be using the resources of organisations with money to invest in getting the cost down, to the point where it is possible to put some kind of abatement on those 11,000 chimneys and have some control of the carbon to be captured. Can that be done in the next stages? Of the countries concerned, one is talking mainly about the United States, where it can be done; China, where they are trying to do it; and India, where they are trying hard but not succeeding at all. They need the engineering skills to install carbon capture and storage, once we have developed systems which are cheaper and more economic. There is a whole new programme there to be developed. Is it being developed and invested in? Is this organisation looking at it? We have not had a single word from the Government—not a word—on the idea that this should be a major part of the story.

The noble Baroness, Lady Liddell, is totally right that this should of course be a major part of the story. I fear that, as with so many parts of the endeavour to get to a green transition, we are losing sight of the main purpose, which is reducing emissions. This nation is superbly equipped to contribute on that front, but not necessarily by itself subsidising more and more low-carbon electricity for our own purposes. We should go that way but not push it too fast, because if we do that then we will slow things down.

If we are to contribute to the world’s efforts on this, which are failing and going backwards at the moment, and to make more progress, we must turn to carbon capture and storage. Why is there no mention of it in the Bill? Please can it go in, through this amendment or in other ways that the Government choose, to indicate that we are serious about reducing emissions and not just about the virtuous side of clean energy, which is very nice and very important but not the main aim?

[Lord Berkeley (Lab)]

My Lords, my Amendment 35 is about the renewable liquid heating fuel obligation, which is something we debated in Committee. I thank my noble friend the Minister for spending time with us and understanding the problems of some of the people who operate in this field. I am grateful to the noble Lord, Lord Bruce, for his support.

This issue affects 4 million people in this country, and about 250,000 businesses, who are off the gas grid and therefore generally rely on heating oil, as I do in the countryside—I declare an interest. These are big businesses and they are no more complicated than other similar systems, but it is a question of whether the renewable fuel obligation could be applied, so that it would be easier for people to continue to use fuel oil with this addition, rather than having to spend a lot of money converting to some other means, which I know has been debated at length.

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[Baroness Young of Old Scone (Lab)]

Sorry, Hansard.

There is a huge hole in the carbon budgets, in which we have all colluded by saying, “Well, carbon capture and storage will fill that hole”. But what happens if it is the emperor’s new clothes and it does not work? We have to be very wary and understand what is happening at the moment. The Government are, quite rightly, throwing quite a lot of money at carbon capture and storage to trial it out as quickly as possible to find out whether we here in the UK can make it happen. If we can, great; let us replicate it very fast. If we cannot, we have to find some other solutions.

My final point is in support of the noble Lord, Lord Berkeley—

[Lord Howell of Guildford (Con)]

I thank the noble Baroness for giving way. I do not want it to sound as though CCUS is the answer to everything, but surely the whole concept of carbon sinks, of trying to preserve our forests—which are rapidly disappearing—and of developing new freshwater areas around the world in desert areas, as has been proposed in a very elaborate series of schemes, is doing just that: they are trying to capture carbon directly out of the atmosphere or from projects which are belting out carbon. What is wrong about that? I do not quite see why she is so dismissive.

[Baroness Young of Old Scone (Lab)]

I am probably breaking the rules here—I should address the House rather than the noble Lord—but nature-based solutions, which create biodiversity and other benefits, such as benefits for human health, mental health, water purification and flood control, are excellent schemes if they can be made to work effectively and cost effectively, bearing in mind all the benefits. Carbon capture and storage from industrial processes or, indeed, from air sources—from carbon that is already out there—is the bit that is not yet tested and not yet proven. We need to get ahead and decide whether we can make that work in the UK, which, I hope, is what the Government are trying to do. Perhaps the Minister will confirm that.

On Amendment 35, I share the joys with noble Lord, Lord Berkeley—not in the same house, I may say—of being an off-grid home owner who wants to do their bit for carbon reduction. At the moment, the choice for the average home owner in a rural property of an aged sort, which is highly dependent on oil because they are off the gas grid, is not terrific. You live in trembling fear of the wretched boiler breaking down: in an emergency situation such as that, the choice that then faces you is either just slamming in another oil-fired boiler, or else shelling out 20-odd thousand and waiting in the cold for six months while they work out how to put in an air source heat pump, which will probably not work at all anyway. It is not a choice. We need options for that rather beleaguered population in the country, many of whom live in aged, drafty houses and have very little assets of their own to be able to upgrade or may have a listed building of the sort you cannot upgrade.

Renewable liquid fuel seems to allow a simple transition using existing kit rather than having to capitalise up front for a totally new technology. It could produce—literally from next week, if you wanted it to—carbon reductions of up to 80%. I support the amendment tabled by the noble Lord, Lord Berkeley, and I hope the Government can do that too.

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[Lord Teverson (LD)]

My Lords, I too very much welcome the Government’s amendment. I would also like to congratulate the noble Baroness, Lady Boycott, on her work to get her amendment there, which I think added pressure. The noble Lord, Lord Whitty, has made a very good point. It may be something that will carry on in other Bills as we go through the Session.

I want to talk briefly about the amendment from the noble Lord, Lord Fuller. There is some truth in it, but I think it is an amendment in the wrong Bill. This whole area of land use will come in when the Government finally bring forward their land use legislation. I would point out that onshore wind has a very small footprint in terms of agricultural land. If we had that 20-mile radius, I am thinking of the first field south of London that has, perhaps, a very modest wind farm or a single turbine. It would probably require a consultation with some 5 million people for that one turbine. So, I think it is the wrong place and the wrong amendment for this Bill, and it discriminates against certain parts of renewable energy. There is something in it in relation to land use that does need to be pursued, but perhaps in a Bill to come later in this parliamentary Session.

[Lord Howell of Guildford (Con)]

My Lords, I have glad tidings for the noble Baroness, Lady Boycott, regarding her concerns. There are between 23 million and 27 million homes in this country still using gas for heating, cooking and warmth. Clearly, that has to be tackled. The answer is quite simple, but complicated as well. The answer is that modern electric boilers can replace all those gas boilers, without having to dig and provide new hydrogen pipes and all sorts of other such complications.

The snag is that electricity is so hopelessly expensive. That is the deterrent. Here we are, wishing to transform millions of homes away from gas, and the pipes then will all become redundant. We can put in modern electric boilers, which can do the job just as well, but the cost goes up rapidly. If only we could focus on how to reduce the cost of electricity by building rapidly—which we are not doing—the cheaper, smaller modular reactors and cheaper devices for producing electricity, and even using more hydrogen on the electricity side; that is another story that we have not really discussed. Even on that basis, we are facing the problem that electricity is very expensive. As long as we keep it that way, as long as we play that game in relation to the overall energy cost, we are shooting ourselves busily in both feet.

[Lord Offord of Garvel (Con)]

My Lords, the topic of community energy was raised several times in Committee by noble Lords on all sides of the House, because it is a highly important aspect of energy provision. When in government, we introduced the community energy fund, which provided funding to specifically target the community energy sector. So, I would concur with noble Lords that it is very important that communities are involved, as they are able to raise and solve issues that are unique to their local community.