Great British Energy Bill

Lord Murray of Blidworth Excerpts

Committee stage
Monday 13th January 2025 Lords Chamber

Moved by

[Lord Murray of Blidworth]

85D: Clause 6, page 3, line 38, at end insert—
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must invest in additional energy storage infrastructure to store excess renewable energy.”Member’s explanatory statement
This amendment would require GB Energy to invest in storage for excess renewable energy with the intention of reducing the cost of curtailment of renewable energy in instances of excess supply.

[Lord Murray of Blidworth (Con)]

My Lords, I rise to speak to Amendments 85D and 85E in my name. I regret that I was unable to speak at Second Reading, but I am pleased to be able to take part in this debate in Committee.

My amendment seeks to address a lacuna in the Bill. As many noble Lords before me have observed, the Bill lacks a vital detail. Parliament is being asked to approve the establishment of a vehicle for the investment of £8.3 billion of taxpayer money, and yet we have no clarity on how this money will be spent. All these decisions will be for Great British Energy to make under the direction of the Secretary of State. We believe that this is a most unsatisfactory way to proceed, and my amendment seeks to probe the Government’s intention on energy storage, as well as giving the Government the opportunity to improve the Bill with a clear statutory duty to invest in energy storage.

Just last Thursday we had a debate in this House on the importance of energy storage, and I agree with the amendments that my noble friend Lord Lilley has tabled. Improvements in energy storage infrastructure will be crucial if we are to continue on our journey to greater reliance on renewable sources of energy. I am pleased that the noble Baroness, Lady Gustafsson, has recognised the importance of energy storage as part of our path to clean energy, as she did last week when she said the Government

“recognises the value of strategic energy reserves as a source of energy resilience and security of supply, balancing system flexibility, particularly during periods of energy supply shortage”.—[Official Report, 9/1/25; col. 845.]

Given the importance of investing in energy storage as part of our long-term strategy, we should surely put this at the centre of this Bill. In fact, the objects of GB Energy, as outlined in Clause 3, include

“facilitating, encouraging and participating in … the … storage … of clean energy”.

It is therefore deeply concerning that the Bill makes no provisions to effect that objective.

Amendment 85E in my name complements Amendment 85D. It is a simple amendment and merely requires an annual report from Great British Energy on the overall cost to the taxpayer of curtailing the supply of renewable energy. This will principally apply to offshore wind, which frequently produces excess supply. Under the current arrangements, the taxpayer pays offshore energy producers to reduce their supply and this has been extremely costly, driving up energy prices for consumers.

In December 2023 the think tank Carbon Tracker estimated that wasted wind power would add £40 to consumer bills, and predicted that this figure would rise to £150 in 2026. Clearly, consumers have a direct interest in us getting to grips with this problem, and the Government would surely agree that the establishment of Great British Energy presents an opportunity to do this. It is therefore critical that GB Energy looks to invest in long-duration energy storage, which would mitigate the increased cost to consumers resulting from wasted energy.

With this said, can the Minister clarify whether the Government anticipate that the Secretary of State will give a direction to GB Energy to invest in energy storage, to ensure we are prepared for what the Germans call Dunkelflaute periods, such as we had just last week when several gas power stations were fired up at great expense to the taxpayer? Do the Government see a role for Great British Energy in helping to improve planning for energy supply deficits in the future? Finally, do the Government agree that improved energy storage infrastructure will reduce our reliance on gas-powered power stations in the future? I beg to move.

[Lord Ashcombe (Con)]

My Lords, I speak in support of these two important amendments, proposed by my noble friend Lord Murray of Blidworth. Thanks to the Library research team, I have gained greater knowledge of the size of constraint payments to the power producers for either constraining production or to rebalance the system. These payments are not insignificant, and I would like to advise them to your Lordships. The years that I am about to cite run April to March. In 2020-21, the amount was £1,070 million; in 2021-22, it was almost £1.5 billion; in 2022-23, it was £600 million; in 2023-24, it was £1.3 billion; and, in this year from April to October, it was £960 million. This gives a total of £4.78 billion. As mentioned by my noble friend, these amounts get added to the bills of consumers, businesses and households.

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[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Lord, Lord Murray, for Amendments 85D and 85E, which are focused on the issue of renewable energy curtailment. I must repeat, as I said earlier, that this debate is, in essence, about technologies, rather than the appropriate use of the directions in Clause 6. However, I assure the noble Lord that we are determined to increase significantly the deployment of short-term and long-term duration electricity storage to reduce curtailment.

I, too, was present in the debate on energy storage last Thursday, which was very interesting. My noble friend Lady Gustafsson recognised then that a variety of energy storage technologies would be needed to achieve net zero. That includes technologies such as lithium batteries and pumped hydropower storage—which can deploy at different scales and provide output over different lengths of time—and it can include emerging technologies, such as liquid air energy storage and flow batteries. Low-carbon hydrogen, too, can act as a low-carbon flexible generating technology and provide very long duration energy storage.

Today, around 7 gigawatts’ worth of grid-scale electricity storage is operational in Great Britain. This is made up of 2.8 gigawatts of pumped hydrogen and 4.3 gigawatts of grid-scale lithium battery storage. I add that we have announced a long-duration energy support scheme. We will publish a technical document in February. Applications will open in the second quarter, and we hope that the first agreements under the cap and floor system will take place in early 2026. It will be technology neutral, and it will be for projects that could not be built without the cap and floor system.

There are some developments in train: SSE, for instance, is doing exploratory tunnelling in the north of Scotland for pumped-storage hydro. Highview Power has reached FID in terms of liquid air energy storage near Carrington. Points on curtailment costs are well made; we see it as a key priority to accelerate network infrastructure to increase capacity on network and reduce constraints.

I do not think there is a lacuna; the Bill is constructed in the way it is. We have Clause 3 and the strategic statement of priorities in Clause 5. I hope I have reassured the noble Lord that the substantive point he raises is important and accepted by the Government.

[Lord Murray of Blidworth (Con)]

My Lords, I thank the Minister for his reply and am provided with some reassurance that the Government take storage seriously. However, for the reasons given by my noble friend Lord Ashcombe, the cost of curtailing output is presently substantial, as the Minister conceded. As my noble friends Lord Hamilton and Lord Offord pointed out, the difficulty with the current structure of the Bill is that we are not moving fast enough to secure sufficient storage capacity such that we do not need to make such large curtailment payments.

I urge the Minister to consider inserting in the Bill, at the very least, some form of requirement for reporting in relation to curtailment payments, which would encourage the market in storage capacity. With that, I am content to withdraw my amendment.

Amendment 85D withdrawn.

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Moved by

[Lord Murray of Blidworth]

85F: Clause 6, page 3, line 38, at end insert—
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must report annually on the impact of its investments on the levels of electricity generated from solar technologies in the UK.(1B) The Secretary of State must lay a copy of the report made under subsection (1A) before Parliament.”Member’s explanatory statement
This would require GB Energy to report annually on the impact of its investments on the levels of electricity generated from solar energy sources in the UK.

[Lord Murray of Blidworth (Con)]

My Lords, I shall speak to my Amendment 85F and support Amendments 85G and 85H in the name of my noble friend Lord Fuller.

Many in the Committee have expressed their concern that the Bill contains no provisions to ensure sufficient accountability and reporting measures. In fact, at present, we have no means to assess the success of Great British Energy in contributing to the Government’s overly ambitious clean energy target by 2030. In previous days in Committee, it was drawn to our intention that the UK investment bank Bill, which is similar in structure to this Bill, had important accountability and report measures. Yet these are removed from this Bill—why is this? The investment bank Bill had a clear and structured framework for accountability and transparency, governed by rules that ensure that taxpayers’ money is used efficiently and subject to rigorous annual reporting, providing the public with the necessary details on its investments and performance. The Great British Energy Bill, on the other hand, lacks any reporting requirements.

This Bill grants sweeping powers to the Secretary of State, backed, as I said earlier, by £8.3 billion of taxpayers’ money. Throughout the election campaign, the Government pledged that that GB Energy would be established in an effort to speed up the delivery of renewable energy. Can the Minister explain how the Government will be held accountable? It is in the public’s interest to introduce accountability mechanisms which allow for oversight of the £8.3 billion being handed over. Ultimately, we say, the Bill grants too much discretion yet lacks proper frameworks to report on the impact of GB Energy’s investments on the levels of renewable energy generated by the United Kingdom.

I am grateful to my noble friend Lord Fuller, who shares my concerns and addresses them in the amendments in his name. He rightly notes that a report on the levels of renewable energy generated by GB Energy and its investments will allow us to assess the potential energy deficit that must be met by sources other than renewables.

We risk jeopardising our energy security if we ramp up renewable at the pace suggested by the Government. This is a matter of paramount importance, and I urge the Minister to listen carefully and to consider the arguments on this group of amendments. I beg to move.

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[Lord Murray of Blidworth (Con)]

I am very grateful to the Minister for that response to this group. Plainly, I am also very grateful to my noble friend Lord Fuller for advancing his amendments. I suspect that, given the weather forecast, those in the control rooms will be glad to get back to patience and solitaire.

I am also grateful to my noble friends Lord Trenchard and Lord Ashcombe for their contributions. We discerned from those speeches that it is unsatisfactory that standby gas generation appears to be driving the price. I agree with my noble friend Lord Ashcombe that this is necessarily worrying, and it seems appropriate for the Bill to contain a direction that the Secretary of State can require GB Energy to provide clear transparency on what is driving the allocation of these renewable prices. It is therefore vital that a measure similar those proposed in these amendments makes its way into the Bill, and I invite the Minister to so consider. With that, I withdraw my amendment.

Amendment 85F withdrawn.