Space Science and Technology

Lord McNally Excerpts

Monday 15th July 2019 Lords Chamber

[Lord McNally (LD)]

My Lords, I first congratulate the noble Lord, Lord Mawson, and send good wishes for the People’s Moon project. I hope that the media give it the coverage it deserves and that it succeeds.

My locus in speaking in this debate is twofold. I hope it is not thought of as one-upmanship to say that I was in Downing Street on 14 October 1969 when Neil Armstrong, Buzz Aldrin and Michael Collins were received by Harold Wilson as part of the world tour that followed their journey to the moon. I have a son, James, who works in Munich as a space vehicle controller—a title that slightly worries me, but he assures me it is perfectly safe.

The past 50 years have seen an amazing movement forward in unmanned exploration. The noble Lord, Lord Rees, was right to draw attention to the fact that we were probably right: the brief we have had and “8 Days: To the Moon and Back” showed, perhaps more than we knew at the time, just how perilous that journey to the moon was.

As the noble Baroness, Lady Walmsley, said, we really are going into a new space age, with lots of encouraging things happening—not least the work by Professor Brian Cox, which has been mentioned, Tim Peake and his adventures and successive Governments in the past 10 years giving legislative and investment support to our space industries.

There are, however, still things that worry me. The noble Lord, Lord Rees, mentioned the future of our participation in the European Space Agency. The Government must really make clear what their intentions and hopes are for our participation in the European Space Agency. I worry that we are moving away from:

“We came in peace for all mankind”.


The Chinese, the Russians, the United States and France all seem to be developing military capacity in space. What is the Government’s view of these dangers? A number of speakers have also talked about the environmental clean-up in space.

I was very interested in the comment from Buzz Aldrin in “8 Days: To the Moon and Back”. On the way back from the moon, he said that space travel would continue because of,

“the insatiable curiosity of all mankind”.

My son James has told me that what has inspired him more than anything else was that “Earthrise” image taken by Apollo 8—our earth suspended in the void. It is a reminder of both our urge to explore new frontiers and our responsibility to our fragile blue planet.

Domestic Renewable Heat Incentive Scheme (Amendment) Regulations 2018

Lord McNally Excerpts

Wednesday 9th May 2018 Grand Committee

[Baroness Featherstone (LD)]

The delay to the laying of these regulations has been hard for the industry. We will not stand in their way; however, perfect they are not.

I am sure the Minister will understand the need to keep a watch on their effect as they come into being as there may be unintended consequences—some of which I shall run through. I seek the Minister’s assurance that the Government will keep them under review and make further changes and revisions where needed. I shall put forward a raft of suggestions in that vein.

One of the shocking aspects of the RHI is how far short of the expected targets it has fallen, as mentioned by my noble friend Lord Teverson. I was watching the Public Accounts Committee session on the RHI and was astonished at the BEIS response to questioning from the committee on the fact that the original target for number of installations was 513,000 by 2020 but, as was mentioned, only 78,000 had been installed by December 2017, as stated in the NAO report.

The BEIS response was even more shocking because it was that this meant we had saved money and that was a good thing. BEIS prayed in aid unsubsidised companies which were doing brilliantly. The Government would reach their targets for emissions reduction and renewable energy production anyway, so it did not matter. I thought that was a concerning approach to the desperate need to decarbonise heat.

The NAO report demonstrated that the ambition of the Government in this regard has been scaled down from their original ambition. The proportion of renewable heat that will not be eligible for RHI has gone up by 270% and the lifetime emission reduction resulting from the RHI has gone down by 44% compared to the original ambition. The Government are not on track at all to reach their fourth and fifth carbon budget targets, and they will be missed. We were all celebrating when we signed the Paris agreement, yet there has been no step change in actions to match the step change needed to meet our commitments, particularly on heat. In terms of our debate today, there is a cliff edge coming in 2021, so will the Minister say what is the Government’s plan? What is going to happen when the scheme ends? The Government have said that they will bring forward lots of studies this year and report on their review in the summer of 2018, which is nearly upon us. Can the Minister be explicit in his response and tell us what we can expect to see and when we can expect to see it?

As the Minister said, there has clearly been a lot of gaming to get subsidies that are not in the spirit of this agenda. Can he tell me how many companies have been caught gaming the system? In the committee, it seemed that most of the checking is done at the point of accreditation and there is relatively little in terms of inspection and audit. If we need regulations changed to clamp down on this, perhaps the Government should also be looking far more strictly at their compliance regime.

I want to address one of the changes in these regulations that have been brought in to address some of the gaming that was mentioned; the drying of wood. It is obviously not the intended purpose of the subsidy, and companies which game the system should be ashamed of themselves, but shame clearly is not working. I totally understand and support the Government’s desire to make changes that will exclude this type of gaming, which unfairly means that those who play by the book find themselves at an economic disadvantage, and margins are extremely tight.

However, there are potential unintended consequences of the new regulations about feedstock rules, and I should like the Minister to address this issue. The regulations in relation to AD rightly want to encourage the use of non-crop feedstock. That means that there will be a greater need for feedstock processes, such as pasteurisation or hydrolysis, to make sure that digestate is safe to lay across the land. It also means that a wider range of feedstock will be used. This is not my specialist subject, but removing potential bugs from the digestate, meeting the requirements of the Environment Agency and reassuring end users that the digestate is okay to spread to land seem pretty important.

As we rightly shift to non-crop feedstock, this will become a bigger issue and the need for these processes will increase, so companies doing the right thing may find themselves penalised economically for doing so under the new rules. Going forward, all RHI projects will use some waste feedstock, and the change to waste eligibility potentially rules out these uses. If the RHI subsidy is not allowed for plants using these processes, projects may be unable to go ahead. The original consultation referred only to withdrawing support from drying “industrial or municipal waste”, and it is a good move in these regulations to remove the ability to game in that way. Is it intended that the policy should also capture pasteurisation and/or hydrolysis in AD plants with the exclusion process for waste? If that is the Government’s intention, how will it work if only a proportion of the input feedstock is waste? Does it mean that even a tiny amount of waste feedstock would render all heat generated ineligible for support? Could the amount of support paid be adjusted based on the proportion of waste feedstock used?

There is a call from some in the industry for flexibility in the system, as there is a difference between AD projects that use heat for pasteurisation or hydrolysis as opposed to blow-drying wood. To indicate some of the financial implications, although each plant is different, this one is an example of potential financial implications on set-up. Funding projects with a current long-term investor requires returns of minimum 8.5%; it would need to be more like 9.5% to 10% on the open market. For an average plant, therefore, the overall cost to build is £12 million. The RHI heat income that would be lost if the changes are interpreted as “no RHI paid on heat for pasteurisation or hydrolysis if any waste is used” means that £880,000 would be lost over a project’s lifetime, taking 0.4% off the project’s returns. Given that these projects are only just achieving the required level, a project that is just about fundable now would not be funded as the return would fall to only just over 8%.

I know that is very detailed. I obviously want to give the Minister time to think about this, but these issues have been raised by the industry. The Minister is getting sympathetic looks from my noble friend on my right. My point is that this is detailed and close, but when margins are close, this is important. We want to encourage these people to set up new plants, not discourage them. This needs looking at and we need to keep an eye on it because it puts people out of business. As small as it seems, it is hugely important.

[Lord McNally (LD)]

I intervene to say that this matter illustrates the importance of these committees, where the industry and Members are able to put on record real concerns that both Ministers and the learned people behind them can take on board for the future.

[Baroness Featherstone]

I thank my noble friend.

Brexit: Galileo Space Project

Lord McNally Excerpts

Thursday 26th April 2018 Lords Chamber

[Lord Henley]

My Lords, I am not aware of whether they have begun but certainly they would provide a way to deal with this matter. The noble Lord is right to stress that there would be mutually assured damage if the Commission was to continue with its suggestion that we should not participate in this programme.

[Lord McNally (LD)]

My Lords, as with the FSA question, is this not a case of where Brexit bravado comes up against the brick wall of reality? If we leave the EU and then have an associate agreement with it of one kind or another, which the Minister cannot define at the moment, it will be weaker than full participation in the Galileo programme. Airbus has already taken its Galileo project out of this country in advance. We will be left for both security and space reasons either seeking such agreements with the United States or the European Union, or, we are now told, going it alone—with a minimum cost of £5 billion. They did not put that on the side of a bus.

[Lord Henley]

My Lords, if not anything else, it suggests the folly of the Commission in making this suggestion. Other countries have not said that they would not like us to participate. That is why my right honourable friend is engaging with other countries. There are benefits to the UK and to the whole EU with us continuing to participate. I repeat that if we do not participate—we are one of the lead players in this—the extra costs of this programme would be €1 billion and it would delay what is a good programme by up to three years.