Energy White Paper

Lord Oates Excerpts

Wednesday 16th December 2020 Lords Chamber

[Lord Grantchester (Lab)]

My Lords, for those watching on catch-up TV, this is the Government’s White Paper introduced in the Commons on Monday. I start by congratulating the Minister on bringing forward this energy White Paper in 2020. His department has indeed done well, after all this time, to fulfil frustrated expectations, and we recognise its importance.

As Emma Pinchbeck of Energy UK says:

“Today’s White Paper is a hugely significant step in the transformation of our energy system”.


The White Paper sets out a historic suite of rhetoric, hyperbole and slogans, but it does have many of the good intentions needed to take on the climate challenge and look to the horizon of energy objectives by building positive, realistic steps, being bold and aggressive, and providing platforms for future development to fill the gaps in our abilities at the moment. But it needs to deliver good solutions in a fair and honest way, sensitive to the needs of everyone across all our communities. In this regard, is the Minister satisfied that the White Paper pays enough regard to the rural aspects of energy and is sufficiently rural-proofed where infrastructure and access to power are limited?

We can be pleased with much that is included here as a necessary first next step. It fills some of the holes in the scattergun 10-point environment plan, and points towards the many more strategies needed in 2020 but which can now come forward only in 2021.

We welcome the support needed to help vulnerable and fuel-poor households over the next six years and the plans for a simpler method of switching energy suppliers through smarter applications. The biggest challenge is to get the buy-in and behavioural change needed so that people do not feel disadvantaged and neglected. When will the Government publish their fuel poverty strategy?

The key elements of the future energy mix set out here are that of at least 30% wind and a doubling of nuclear, with further investments in new technology developments and decarbonisation. Much will depend on the integration of technologies—for example, carbon capture and storage alongside hydrogen power development—but the £1 billion promise of a cluster of carbon capture and storage solutions merely replaces the error-strewn cutbacks of previous Conservative Governments. It is good that the Government learn from their mistakes, even if they may learn slowly.

Much comment has been generated by announcements concerning the nuclear sector. The announcements last week, followed by the White Paper details, will go a long way towards helping relations with the French in the Government’s present negotiations, especially concerning EDF and Sizewell C in Suffolk. This will secure a dependable baseload of energy for London and the south-east. However, the Government have yet to state their preferred funding model, with further delays before progress can be made. With the lack of appetite to pay for another nuclear plant, is the Minister concerned that the pace of change needed points rather more to the development of small modular reactors through the demonstrator advanced modular reactor—AMR—to unlock the potential £300 million private sector match funding? SMRs have the advantage of being factory reproduced, being positioned adjacent to cities of 400,000 to 500,000 and leading to many more UK-based jobs. The agility of rolling out seven of them would match one Sizewell C, with far less disruption to coastal communities. They would also be far less vulnerable to attack or cyberintervention.

The energy White Paper is clearly deficient in the creation of jobs and the retraining and reskilling that would be required. The widespread view is that the £160 million investment in ports is merely a drop in the ocean compared with the scale of the need. Has the Minister’s department a proper plan to develop the new skills required for those in fossil fuel industries? Will the department work with trade unions and colleges to develop this plan with the Department for Education?

This integration and companion development of technologies also points to a far more ambitious plan for wind, CCS and hydrogen to work alongside each other. The ambition must be to meet the challenges of heating the nation’s homes and buildings with hydrogen gas. Years ago, the Government abandoned the zero-carbon home standard due in 2016 and still there is no date or plan for new homes to be zero-carbon. Today, 80% of the buildings that will still be standing in 2050 have already been built. Yet the Government have still to come forward with comprehensive retrofit plans for insulation and heat conversions. Does the Minister commit to working with local authorities to develop a comprehensive street-by-street plan to be published next year?

It is disappointing that the White Paper continues to ignore tidal power, after the very useful Hendry review, and the jobs it would create. The White Paper continues also to underplay the clear need for energy storage development, long regarded as a solution for intermittent renewable generation. Yet again, it continues to ignore the call for the inclusion of international aviation and shipping in the targets, as recommended by the Committee on Climate Change.

With a clear need for a zero-carbon power sector by 2035, and for carbon pricing, there is still a lack of clarity to the plans needing to be implemented in merely a few weeks’ time in the new UK emissions trading scheme, due to start in January.

The Government need to recognise the need for a series of right decisions to be taken more quickly. Monday’s Question on the advice of the Committee on Climate Change highlighted how, already, the Government’s nationally determined contribution is out of date. With the delays in publication, this White Paper should now meet the fourth and fifth carbon budgets, but the pace of change needed is accelerating. The remorseless warming of the climate continued into 2020—this year—regardless of the world economy suffering the shock and falls in economic activity following the pandemic. Regrettably, the White Paper is nowhere near the requirement set by the Climate on Climate Change to meet the sixth carbon budget. I finish by asking again: what plans do the Government have to fill in the gap between this White Paper and the sixth carbon budget? Those plans will be needed for COP 26.

[Lord Oates (LD) [V]]

My Lords, I welcome the ambition and vision set out in the White Paper; however, as the Minister will be aware, ambition and vision are necessary but not sufficient conditions for success. What we need now is attention to detail and practical, credible implementation plans. Sadly, the White Paper lacks them.

First, while it rightly emphasises the need to secure a fair deal for consumers, the White Paper fails to set out credible means of doing so. Can the Minister tell us why the paper envisages the cost of decarbonising our energy system continuing to be piled on to electricity bills? It should be borne fairly across the economy, because placing the transition costs on bills is both highly regressive and counterproductive if we want, as the paper rightly suggests, to shift from gas use to electricity. Will the Government correct this omission and act to reduce electricity bills by shifting this burden?

Secondly, the White Paper places an emphasis on expanding offshore wind generation. I welcome that, but there is no reference in the Statement to onshore wind generation, one of the cheapest forms of generation available, and it is referred to only fleetingly in the paper. Can the Minister explain this?

Thirdly, nuclear continues as a government obsession, even though it is now ruinously expensive compared with non-carbon sources of energy. The physical engineering requirements for nuclear have always been extremely challenging, but the financial engineering required is now impossible. And yet we continue, despite the fact that, over 60 years since the UK’s civil nuclear programme began, we still have no means of safe, long-term storage of high-level nuclear waste—waste that is deadly for longer than any human civilisation has ever survived. How can the Minister justify such an economically and morally illiterate policy?

Fourthly, the White Paper envisages 5 gigawatts of hydrogen capacity by 2030. Can the Minister clarify whether this is green or blue hydrogen CCUS and tell us who will assume long-term liability for CO₂ storage under the Government’s plans for carbon capture and storage? Does not this liability issue further underline why our focus should be on green hydrogen? Does the Minister recognise that we need to invest heavily now in contracts for difference to further drive down the rapidly reducing costs of green hydrogen in the way that was done previously on wind generation?

Fifthly, the Government have relied in their Statement on the ability of home energy efficiency upgrades to reduce domestic energy bills. The Liberal Democrats agree that energy efficiency measures are critical to tackling emissions and reducing bills, but this is another area where government action falls short of its rhetoric. The Government told us that the Green Homes Grant would deliver 600,000 home energy efficiency upgrades by the original end date in March next year. It is likely to be a fraction of that. Can the Minister tell us the actual numbers that will be delivered by that date?

My noble friend Lord Stunell, a former DCLG Minister with huge experience in this area, could have told the Government that this would be the case. In fact, he did tell the Government—repeatedly. Does the Minister not recognise that there is no hope of upgrading the 28 million homes that need it unless we have a long-term investment programme that provides industry with the confidence to invest in the recruitment and skills training required?

Finally, will he agree to consult my noble friends Lord Stunell and Lord Foster of Bath, who, as former Ministers, both have extensive experience in this area and could help the Government prevent mistakes like this reoccurring in the future?

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

I thank the noble Lords, Lord Grantchester and Lord Oates, for their comments, particularly the noble Lord, Lord Grantchester, who was fairly positive in pointing out some of what he agreed with. He said that the Statement was largely positive, with some good solutions, and that he was pleased with much of it—although he did have some critical questions, which I will come to. The noble Lord, Lord Oates, was slightly less positive, and had some questions which I will attempt to address as well.

Both noble Lords raised the issue of poorer households, and they were right to do so. We have set out measures that will help households manage their energy consumption and keep bills fair and affordable, providing financial support for the most vulnerable and low-income households of at least £6.7 billion over the next six years. That includes the Green Homes Grant that the noble Lord, Lord Oates, referred to, which could see lower-income households save up to £600 a year on their energy bills, and the warm home discount scheme through to 2026 to cover 750,000 extra households. I understand the ambition that the noble Lord, Lord Oates, wishes us to meet, and I think we are making a good start, even if we do not perhaps match exactly what he would like to see.

Both noble Lords raised the subject of low-carbon electricity, which is vital. We are committed to fully decarbonised electricity generation by 2050. The current trajectory should see us largely decarbonised in the late 2030s. They both also referred to offshore wind power, and we have a manifesto commitment of 40 gigawatts of offshore wind, including 1 gigawatt of floating wind, by 2030, which will support up to 60,000 jobs.

Both noble Lords raised the important subject of hydrogen. We are aiming for 5 gigawatts of hydrogen capacity by 2030, which will unlock £4 billion in investment and support for up to 8,000 jobs. That is why we are supporting the deployment of power with CCUS by 2030, as the noble Lord, Lord Oates, referred to.

Nuclear power was raised. We believe that nuclear power continues to be an important source of clean, reliable and safe energy as part of our net zero mix. It will help result in lower costs for consumers. With the existing nuclear fleet largely retiring over the next decade, we do need further capacity. That is why the Government are entering into negotiations with EDF on the Sizewell C project in Suffolk, with a view to making an investment decision on a large-scale nuclear project before the end of this Parliament.

The noble Lord, Lord Grantchester, asked about the Committee on Climate Change’s advice on carbon budget 6. It is fair to say that, across the majority of our policies, our ambition to 2030 is broadly equivalent to that set out in the Committee on Climate Change’s advice. The White Paper actually goes further than the CCC in the deployment of low-carbon hydrogen production by 2030. We believe that our NDC is in line with its recommendations. Consistent with that ambitious plan, we want to create the space for companies to innovate and find new and better ways to achieve this target. As always, we remain grateful to the CCC for its advice. We will set out our approach to its reports and to achieving our emissions reductions targets in the net zero strategy next year.

The issue of SMRs was raised by the noble Lord, Lord Grantchester. I agree with him that this is an area that will be fruitful in the future and one that we need to move forward with and support.