Revised Energy National Policy Statements

Lord Lennie Excerpts

Tuesday 22nd February 2022 Grand Committee

[Lord Lennie (Lab)]

My Lords, I thank the Minister for his comprehensive introductory statement and all other noble Lords for their contributions to this debate. My noble friend Lord Whitty made it plain that there is not enough imperative in these statements. They need, I guess, to be more inclined towards planning consents rather than against, or a balanced view. The noble Baroness, Lady Neville-Rolfe, reminded us that it is about keeping the lights on at the right price. The noble Lord, Lord Teverson, reminded us about avoiding silo thinking. The noble Lord, Lord Moynihan, was on about prices and costs, as a gas advocate.

The noble Baroness, Lady Sheehan, asked how often this policy and these NPSs would be reviewed. The noble Baroness, Lady McIntosh, talked about the rural effect and rural-proofing future policy, while the noble Baroness, Lady Jones, talked about replacing the whole policy, in her usual fashion. The noble Baroness, Lady Foster, advocated fracking, rather than importing fracking from the United States. The noble Lord, Lord Naseby, supported nuclear fuel, as we do as well, and advocated solar as a future-proofing of warehouses. Then we came to the noble Lord, Lord Oates, who introduced the whole concept of “differenter” to all of us, a new language for us all to grasp.

This national policy statement updates the Liberal Democrat Minister’s statement in 2011 in the coalition Government. I may be wrong, but I think that it was a Liberal Democrat Minister at the time. It will form the framework within which the Secretary of State will take decisions on the nationally significant energy infrastructure developments under the Planning Act. As we have heard, it is accompanied by a series of specific statements which in combination establish the criteria that will be taken into account when considering energy planning applications. The need for the update, as we have heard, is explained by the Government announcing the move to net zero, to be brought forward and achieved by 2050, and the marker, that we will have moved three-quarters of the way towards this by 2035. They are both confirmed in the NPS.

The dash for gas has screeched to a halt and is replaced by a reaching out for renewables. What we have is the establishing of a prime market in energy of wind, solar and nuclear fuels, with only a back-up residual use of carbon fuels as a supplement. This policy shift is welcome—but is it entirely believable? Currently, almost 80% of UK energy is fossil-fuel generated, and there are reports that the Government are about to announce, or have already announced, the licensing of six new oil and gas fields in the North Sea. The Times on Monday carried an interview with Greg Hands in which he confirmed, or appeared to confirm, that the North Sea fields would be developed as a new prime market develops. Is that true and, if so, do the Government believe that it is consistent with the prioritising of renewables in the NPS? What message do they think that it would send out to the energy market and the energy sector overall?

On timing, the need to speed up the planning process and decision making is essential, given the rightful hastening of the net-zero target. Evidence given to the BEIS Select Committee reveals that, while it takes only a year to build an offshore wind farm, it takes about eight years to get planning consents through the process. The NPS establishes a new legal framework for planning decisions, balancing the need for infrastructure against its impact on communities. If it takes eight years to gain approval for new infrastructure to support renewable energy production, it is unlikely that any approvals will be achieved before the next likely review of this NPS. Is the Minister concerned about the timescale, can it be shortened—and, if so, what evidence can the Government point to in support of that? The energy sector needs answers to these questions before risking capital on major infrastructure projects.

That leads to the whole question of costs and prices of energy. The NPS makes passing reference to the costs of energy, but does not focus on it, despite the fact that it is clearly the number one issue facing household budgets. The Chancellor has announced that households will be forced to take a loan from the energy companies in the short term, to be to be paid back in the medium term, but has not offered any longer-term solution to the problem of these high energy costs, other than the prospect of repeated compulsory loans across the board. The NPS skirts around this. It talks about energy at affordable cost, but does not put forward any proposals about how that will be achieved. Does the Minister see the issue of costs as a short-term one or as a strategic problem and, if the latter, how does he feel it should be addressed, and does he think it should be addressed in this NPS?

A decarbonised future should make the UK less reliant on the importing of energy; 79% of energy is currently fossil-fuel generated. Currently, the UK imports about half of its gas-fired energy; it is therefore significantly subject to world price movements, over which the Government remind us they have little influence or control. But the Government of the nearest neighbour, France, have announced a 5% increase, while here in the UK we face a 50% price hike in the Ofgem price cap review.

The Labour Party has no doubt that nuclear energy should play an increasingly significant part in the energy mix of the UK’s decarbonised future. Parliament debated yesterday the financing of nuclear energy, and strategically the two are interconnected—so the absence of any strategic proposal in the NPS is all the more surprising. About half of UK gas is imported, and about one-third of UK energy is gas-fired, so it is a big number when considering the fuel costs that the industry has little control over. Does the Minister see a future when UK energy cost and prices are in the main controlled by decarbonised UK energy markets? If so, when is that likely to happen, and by when will the UK no longer be reliant on importing a significant proportion of its energy?

Onshore wind development has been removed from the NPS—maybe it was in 2016, I am not sure. That appears to show a lack of confidence in that form of energy. I do not know whether it does not meet the de minimis level for inclusion in the NPS, but why was that decision taken and what impact has it had on onshore wind development? Is it because of its not meeting the de minimis levels, or other factors?

The NPS sets out a series of factors that will be taken into account by the Secretary of State in reaching his decisions about approvals of infrastructure projects. How many consents have been made since the last NPS was published? Does the Minister believe that it will increase significantly in the period before the next review? While we are on that subject, when does the Minister feel that the next review should be? Should it be in five years, as discussed in the evidence sessions before the statement was released, or in 10 years, as is the case with this NPS update from the last one? The pace of change and development in energy supply and infrastructure will be exponential in the next period, if we are to meet net zero, and the NPS needs to future-proof to reflect this. Government policy appears to be “wait and see” before judging planning applications, which will almost certainly mean that we do not meet our net-zero ambitions.

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[Lord Lennie (Lab)]

The planning process for renewables and low-carbon development such as hydrogen and CCS should ensure support for infrastructure projects such as aviation over and above competing interests. The inclusion of emerging technologies alongside renewables that will contribute to net zero—hydrogen, CCS, biomass—as well as the infrastructure and storage necessary, should be advanced and advocated by the NPS. A presumption in favour of them in the planning process should be the watchword of the NPS, not neutrality as it currently appears; I think the noble Lord, Lord Whitty, made that point.

The long timescale between this and previous NPSs has resulted in policy falling significantly behind current thinking and technological advance. Keeping NPSs under ongoing review and updating them as required would be more likely to reflect advances in technological development and would therefore more likely play an important part in our move to net zero.

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[Lord Callanan (Con)]

The whole purpose of these national policy statements is to try to speed up the planning process in the first place by setting a national framework within which the local decisions can be taken. As with all these things, it is a question of getting the balance right. Of course we want to try to speed up the process, but the problem with energy policy is that it takes many years, if not decades, to put the infrastructure in place.

We are announcing, we hope, some progress on new nuclear and passing new legislation in the next few months to enable it but we will not see the fruits of that until the early 2030s. The process for the infrastructure which we see in place now was put in place 10 or 12 years ago. The reason that we have a problem with nuclear now—I am sorry to bring it back to party politics—was because when Labour came into office in 1997, that Government ruled out new nuclear. Tony Blair said in the manifesto “We see no case for new nuclear”. Now, that is a party-political point and I think many Labour Members now think that was a mistake—maybe it was right in the context of the time but it was probably a mistake. Correcting these mistakes takes many decades in order to get the infrastructure in place.

[Lord Lennie (Lab)]

If I may reinforce the point I made, if it takes eight years to get consent for something, that is eight years before the first brick is laid, as it were. If that period can be foreshortened, the fruits of the labour can be brought forward accordingly.

[Lord Callanan (Con)]

We are always open to finding new ways of speeding these things up, but you also have to take into account the concerns of local communities which have to put up with this infrastructure and try to mitigate the effects on them.

I return to the point that my noble friend Lady Neville-Rolfe asked me about heritage coal. I am very well aware of this issue; I am told that my noble friend Lady Bloomfield is a hero in the heritage railway community because she was able to write to them to say that heritage coal would still be available to them to operate their railways. There are many sources of coal apart from Russia. Significant quantities of coal are still produced in Germany and Poland, so I am confident that they will still be able to get the coal to power their excellent machines. I do not think anybody, even the most committed climate zealot, would object to the relatively small quantities that they would use for their heritage equipment.