Energy Bill [HL]

Lord Lennie Excerpts

Report stage
Tuesday 28th March 2023 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, I offer Green support for the amendments in the names of the noble Lord, Lord Teverson, and the noble Baroness, Lady Sheehan. The economic arguments for why hydrogen as a home heating mechanism makes no sense at all have already been very clearly made. I aim not to repeat anything that has been said but simply to add a couple of points to it. I very much agree with the point made by the noble Baroness, Lady Worthington, about prepayment meters; that was written in very large letters on my paper, but I have now crossed it out since it has already been covered.

In this debate we have not perhaps highlighted the degree of physical disruption. The noble Baroness, Lady Worthington, referred to receiving many expressions of distress from the affected villages; I have also received those. In the Government’s own terminology, research shows that it will

“undoubtedly result in some physical disruption to the property.”

Those are the Government’s own words. What that actually means is that we will have to see pipework surveyed and possibly changed; gas meters replaced; boilers, gas hobs and gas cookers replaced, as well as four-inch ventilation holes in the area of the boiler and the appliance to make it compatible for 100% hydrogen. The biggest challenge of all, perhaps, is the small in-house pipes that may frequently be embedded in walls or underneath floors. Think about the kind of disruption in an older house; just tracking those down, finding where they are and establishing whether they are adequate for hydrogen is massively disruptive. Every home will have to be checked and double-checked to make sure it is safe before hydrogen can be piped into it.

The other safety point that has not been raised yet, but I think really should be, is that burning hydrogen in the air produces nitrous oxides, which are a pollutant in their own right. It is often said that when you are using hydrogen, water is the only by-product, but that is the case only when hydrogen is used in fuel cells. Nitrogen dioxide is a key air pollutant that is harmful in its own right and is a precursor to other concerning materials including fine particulate matter and ozone.

I have just one final thought. I understood the considered narrative of the noble Baroness, Lady Worthington, about how we got to where we are, but when I go around your Lordships’ House and see the people who are propounding the idea of hydrogen for home heating, I notice that it is of course the existing industry and the vested industry interests. That cannot be how we decide our energy future, in so many areas but perhaps particularly obviously in this one.

[Lord Lennie (Lab)]

My Lords, I thank the noble Lord, Lord Teverson, and all other noble Lords and Baronesses who have spoken. While I may agree with the noble Lord, Lord Teverson, that these trials are not a good thing, they are upon us and therefore we have to deal with what we face rather than what we might not have faced had we stopped the trials in the first place. I do not think the Government are about to abandon the plan, and therefore we have some concerns about the plan as it goes ahead.

Clause 111 makes certain modifications to the Gas Act 1986 so that the person running the trial has clear grounds to enter property. That causes me concern that they can carry out essential works and safety checks and disconnect gas supply. Can the Minister deal with some questions? He may not be able to deal with them tonight and may want to write to me later. When can property be entered? What safeguards will be in place? What burden of proof will be applied on entry? When can a property not be entered? Will future guidance be published and, if so, when can we expect it to be with us? The Labour amendment

“requires the Secretary of State to take a number of steps with regard to the areas and people affected by hydrogen grid conversion trials and to make arrangements for Ofgem to provide information, alternative heat sources and offer the right of opt out (which would disapply the right of gas transporters to enter premises to disconnect). It would also require the Environment Agency to monitor and report on hydrogen escape, and the Health and Safety Executive to monitor safety implications.”

Subsection (1) provides the Secretary of State with a power to make regulations by statutory instrument to require a person conducting the trial to follow specified steps to ensure consumers are appropriately informed about the trial and the need for them to be disconnected from their gas supply before it happens. This clause also provides the Secretary of State with a power to make regulations to introduce consumer protections for people who are, or are likely to be, affected by the trial, and a list of examples is provided.

Our amendment sets out a number of reasonable steps, ensures that people are not disadvantaged, whether they participate or take an alternative, and ensures an alternative is offered and they can opt out. The trials are much more popular in Redcar, I am led to believe, than they are in Whitby. An exchange of correspondence took place between Graham Stuart, the Minister at DESNZ, and Justin Madders MP and Louise Gittens, who is the leader of Cheshire West and Chester Council. To quote from the letter from Graham Stuart, he said:

“I fully agree that local support for the trial is essential … However, we will only go ahead with a trial in an area where there is strong local support … I do agree it is very important this context is set out clearly, particularly for the communities in the areas across the country served by the gas networks which the networks are assessing.”


If that is true, certainly in Whitby, I do not think a trial will proceed, but I may be wrong. I would welcome the Minister’s assessment of the correspondence and what he makes of it in relation to the trial. It is not so much about cost, although there is a cost, and it is not so much about safety, although there is a safety issue; it is about local democracy and whether they want the thing to go ahead in the first place.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

I thank all noble Lords who have contributed. I start by addressing the point raised by the noble Lord, Lord Lennie. This is a matter for which I have ministerial responsibility, so I am familiar with all the issues. I too am getting, not a massive stream of correspondence, but a lot of correspondence from the people in the two trial areas. I have met Justin Madders, the MP for the Whitby trial area, Ellesmere Port, and of course I know Jacob Young very well from Redcar. The point that Graham Stuart made in that letter is still absolutely valid. We are waiting for the submissions of the two rival networks, which we should receive later this month. A lot is happening this week; it is a busy week. One of the factors that we will carefully take into consideration is precisely the point that Graham Stuart set out in his letter: the degree to which there is local support. Clearly, one way to measure that is to talk to the local Members of Parliament and the local authorities; that will be critical in any decision-making.

Let me also address the question from the noble Baroness, Lady Worthington, on the costs of the trial. I cannot give the noble Baroness an overall cost yet because we have not received the final submissions from the networks, but I can say that consumers in the trial location will not be expected to pay more for their heating than they would have if they had remained on natural gas. They will also not be expected to pay for the installation and maintenance of either any hydrogen-capable appliances or any alternative heating option that they wish to go for.

Let me now address Amendments 53, 54 and 57, tabled by the noble Lord, Lord Teverson and the noble Baroness, Lady Sheehan. As noble Lords will know, decarbonising heat in buildings and industry is essential if we are to deliver net zero. One of the great things about this country, but also one of our problems, is the massive diversity and age of buildings in the UK, as a product mainly of the industrial revolution, and the diverse consumer needs. I think most reasonable people would accept that no single solution can provide the best option for everyone. I agree with the noble Baroness, Lady Worthington, that the majority of the solution will probably be electrification, but there will be some properties for which it is not suitable.

--- Later in debate ---

[Lord Callanan (Con)]

I know the noble Baroness has strong views on electrification but let me reassure her that this is precisely the purpose of the trial. We need to use an existing network to find out what happens to hydrogen in an existing network. Clearly, environmental monitoring and checking for leaks and so on is a crucial part of it. It is one of the reasons we need to do it on an existing network in an existing community, to find out what happens outside of theoretical lab experiments where it is very easy to set up a trial with new pipework, new valves and new equipment. I have visited hydrogen demonstration houses up in Gateshead, my home area. It works very well but these are brand new properties, constructed with hydrogen appliances and new pipework. That is not a very good trial as to how it would work in the real world in existing communities. That is why we need to do the trial. The things that the noble Baroness asked about are exactly what we need to be checking and monitoring to judge the effectiveness of any hydrogen experiments in the real world.

I turn to Amendment 56, tabled by the noble Lords, Lord Lennie and Lord Teverson, and the noble Baroness, Lady Sheehan. This amendment covers several aspects which I fully agree are important for the safe and effective delivery of the village trial. However, I assure noble Lords that the evidence that this amendment seeks to gather through a statutory consultation is already being gathered and will be reviewed by the department as part of our assessment process, following the submission of final proposals at the end of this month. As I said, in May 2022, we sent a joint letter with Ofgem to the gas networks setting out an extensive list of requirements that proposals for the trial should meet. This included requirements mentioned in the amendment, such as local support, costs, environmental impact and consumer protections, as well as many other important areas.

After the gas networks submit their proposals for the trial—later this week, as I said—the department will undertake a thorough assessment against the full list of requirements set out in the letter. That process will involve expert input from the various statutory bodies involved, including the Health and Safety Executive and Ofgem. We will publish the result of that assessment later this year, including the relevant evidence to explain our decision, and that will be available to all noble Lords. I reassure the House that we fully understand the importance of conducting the trial properly.

I touched on this earlier but the noble Lord, Lord Teverson, raised the point about local support for the trial. I reiterate that we will go ahead with a trial only in an area where there is strong local support. The gas networks are working closely with local authorities, communities and Members of Parliament as they develop their trial proposals. My officials also meet regularly with the relevant local authorities. Final proposals for the trial will need to contain evidence of strong support from the local community, validated by an independent external source, such as a local council. Again, I am happy to meet the local Members of Parliament.

The networks are extensively consulting local residents to develop an attractive consumer offer tailored to the community. They have opened drop-in centres in both Whitby and Redcar where anyone can engage directly with them and ask questions about what the project means for them, and have held a number of public events.

Safety is of course fundamental, which is the point made by the noble Baroness, Lady Sheehan. Before any community trial can go ahead, the Health and Safety Executive will need to be satisfied that the trial will be run safely. No trial will go ahead until all necessary safety assessments have been successfully carried out. I hope noble Lords will accept my reassurances on that.

If it goes ahead, the trial will start in 2025 and provide vital evidence that will be required to enable the Government to make decisions in 2026 on any potential future role for hydrogen in decarbonising heat. I hope noble Lords will accept that undertaking another formal consultation would duplicate the work that the department and the gas networks are already doing, and could delay important milestones for ultimately meeting net zero.

I agree that the trial must be conducted properly, and I have already spoken about the additional consumer protections that will be in place for the trial. Those protections, which must be met by the gas networks, also mean that the trial must be delivered with minimal disruption to consumers.

I hope I have been able to reassure noble Lords that the department will carefully consider all these factors in coming to a decision on the trial. Importantly, we will be closely examining the evidence and outcomes of the gas networks’ engagement with local authorities and consumers in the trial areas. I hope that, with the reassurances that I have been able to provide, the noble Lord, Lord Teverson, will consider withdrawing his amendment.

[Lord Lennie (Lab)]

Could the Minister please write to me about the questions I asked about entering properties and whether further guidance will be published and available?

[Lord Callanan (Con)]

As I said, the powers that we propose to provide are essentially similar to those that the networks already have on the basis of essential safety works. Still, I am happy to provide the noble Lord with further information and details.