Revised Energy National Policy Statements

Lord Oates Excerpts

Tuesday 22nd February 2022 Grand Committee

[Lord Oates (LD)]

My Lords, the Liberal Democrats welcome the fact that the Government have set an ambitious net-zero target for 2050 and have recognised that that requires a 2035 decarbonisation target for the climate sector. We also welcome the target of 40 gigawatts of offshore wind for 2030. All this ambition is welcome, and we welcome the recognition in the Overarching National Policy Statement that wholesale transformation is required in our energy system. However, we remain unconvinced that the Government recognise what they have to do to achieve those targets. These national policy statements underline the gap between rhetoric and the detailed application and clarity that are required.

The net-zero target must be the overwhelming priority and challenge for the energy sector and for government as a whole. However, these documents simply do not supply the clarity and detail that the energy industry, the planners and other decision-takers will need. To have any chance of meeting the 2030, 2035 or 2050 targets, we need a much more joined-up approach across government and industry.

The national policy statements seem to be, at best, nodding acquaintances of the Energy White Paper, the 10-point plan, the offshore transmission review and the holistic network design policy—and, at times, almost complete strangers to them. The NPSs need to be clear about how the various policy documents should be taken into account by promoters and decision-takers, because the lack of integration threatens to fatally undermine the Government’s ambitions. If we are to deliver 40 gigawatts of offshore wind by 2030, we need the transmission infrastructure to deliver it to where it is needed. As the noble Lord, Lord Whitty, said, we must address the issue of an offshore grid and how we bring it onshore. The noble Baroness, Lady McIntosh, made the startling point that we lose 30% of power in transmission, so we must think about a much smarter and more locally distributed grid.

We must think much differenter—if that is a word—about the whole way we deal with the energy system. It is not a word, by the way. As a result of all this new infrastructure, there will have to be new substations, cables and so on. It is important that we think about how the impact on communities is mitigated. What is the Government’s approach to undergrounding cables, particularly in some rural areas? What is their approach to the mitigations that communities need? Industry needs clarity on this, because it has to plan, but it does not get that from these documents.

Energy storage and release will also be critical in the new energy system that we will need. The NPS needs to be much clearer about the scale of what is required. EN2 talks about pumped hydro storage and it is welcome that it does, although it gives little detail, but there is nothing about using green hydrogen as a storage vector. The Minister will correct me but I think that, in the past year, about £1 billion was paid to abate wind. This is crazy: that wind power could be creating green hydrogen, which could then be used where we need it in the energy system. We need much more about that. That is one of the points we were discussing in the debate yesterday on the Nuclear Energy (Financing) Bill. The Government must think much more creatively about how we deliver power.

The noble Lord, Lord Whitty, and a number of others stressed the importance of energy efficiency—the noble Baroness, Lady Jones, in particular. That is critical. It is crazy that so much of the energy we consume at the moment is going not to heat us, but straight out of the roof or the windows. We need a national plan for energy efficiency. Again, we discussed this yesterday. The Minister protested that much was being done and agreed with the noble Lord, Lord West, that it was also all terribly difficult. Some of it certainly is difficult, but a lot actually is not.

What makes even the relatively easy quite hard, however, is that there is a real lack of skills. For instance, if you want exterior wall insulation on your house and are in London or the south-east, good luck with that, because the few people who can deliver it are up to their eyeballs in work—and loads of them have just given up. There have been various government projects, such as the green homes grant scheme, and previously, under the coalition, the Green Deal scheme. But the industry invests, the schemes are then scrapped and now those people are fed up.

We have a massive skills shortage and there must be a plan to deal with it. If the Government care about levelling up, one of the best ways they could deliver jobs all around this country would be to reduce the energy we consume and how much we pollute our planet. We know that the Treasury is always behind these schemes going wrong, so I have a lot of sympathy with the Minister because it always thinks in the short term and these schemes can be delivered only in the long term.

Some noble Lords who spoke in this debate did so as if the climate emergency was a concept that we could choose either to believe in or not. I can only assume that the noble Baroness, Lady Foster, has not read the IPCC report on the impacts that are coming from climate change because there was certainly no mention of them whatever in her speech or, I think, of climate change at all. We heard a lot about what she regarded as absurd, but what is really absurd is that we are still building houses that leak energy. We should have had a standard in place from 2016; one was put in place by the coalition Government but scrapped by the Government who came after them. We should not be building homes that leak energy or have no national plan for the energy efficiency of our building stock. We should never have done what the Government who came in after the coalition did, which was effectively to ban onshore wind.

The noble Baroness, Lady Neville-Rolfe, raised the issue of green levies—the noble Lord, Lord Forsyth, raised it in the Chamber earlier. We really need to be clear that it is not green levies that are pushing up energy bills at the moment but the staggering cost of fossil fuels. The sooner we move off them, the better. That is what we need to be doing. In fact, total household expenditure on energy bills fell between 2010 and 2020. It did so in large part because of the energy efficiency measures that were funded through the green levies, so we should not allow this misnomer to take hold.

My noble friend Lady Sheehan raised the concerns of the energy industry about the policy statements. I hope the Minister will answer some of the very legitimate questions that the industry posed, particularly on how the various government policy documents should be taken into account by decision-takers. Also, what is expected from industry on community mitigation and why is the work of the offshore transmission review and holistic network design not properly addressed in the NPSs? How will those statements be expanded to include hydrogen and CCS, in line with government policy?

I was struck by my noble friend Lord Teverson’s question about when the geological disposal facility will come online, and whether the date in the original nuclear planning statement for operation of the GDF from 2130 was correct. I must say that it seemed like the first realistic statement I have heard about that geological disposal facility, because we have been told decade after decade that it is just around the corner. I hope the Minister can clarify that.

As I said at the outset, we welcome the Government’s ambitious targets but we need the detail about how they will be met. These national policy statements fall short in doing that.

--- Later in debate ---

[Lord Callanan (Con)]

My Lords, I thank everyone who contributed to this debate. As always, it has been interesting and informative, if not all directly related to the subject under discussion—I am looking at the noble Baroness, Lady Jones; I will come on to that in a minute. I will address many of the points made in turn, but first I will bring the Committee back to the subject under discussion and will talk about the energy national policy statements.

Our world-leading agenda to transform the energy system requires a planning framework for nationally significant infrastructure which can process the pace and scale of planning decisions in line with this transformation. Updated energy NPSs are critical to achieving this. The review will make the policy framework for the provision of energy infrastructure clearer and more up to date.

In the context of the wider reform programme for nationally significant infrastructure, up-to-date energy NPSs will support project sponsors, the Planning Inspectorate and ultimately the Secretary of State in timely consideration and decisions over when and how to provide significant to critical infrastructure.

We believe that the documents we have consulted on and which are being examined by the committee of the other House at the moment strike the right balance between the need for new energy infrastructure and the impact that such infrastructure will have, and they will enable planning decisions to be taken at the required pace.

I thank the noble Lord, Lord Whitty, and many other noble Lords who have used this debate to make some interesting and wide-ranging comments on energy policy. However, I repeat that our purpose today is to consider whether the NPSs are fit for purpose in performing their critical purpose, which is to provide a legal framework for planning decisions on nationally significant energy infrastructure.

I thank my noble friend Lady Neville-Rolfe for her comments on timing and security of supply. Within that, the NPS establishes the need for the infrastructure required to deliver the energy objectives. This includes ensuring that we have a supply that is secure and reliable as well as consistent with our net-zero ambitions.

A number of noble Lords, including my noble friends Lady Neville-Rolfe and Lady McIntosh, the noble Baroness, Lady Sheehan, and the noble Lord, Lord Lennie, asked me about the timetable for future reviews. Of course, there will be change over time, and we will review the documents when appropriate—so I do not want to give an absolute commitment to a specific time; we will do it as required. The exact timing of a review will depend on the specific circumstances that apply in the case of each national policy statement, but it is expected that a public announcement on whether a review is required should be made at least every five years. This reflects the position that was set out in the Government’s published guidance.

I thank the noble Lord, Lord Teverson, for his comments on biodiversity. He will be aware that Schedule 15 to the Environment Act 2021 introduced specific requirements for biodiversity net gain in relation to NSIP development. This schedule is not yet in force, and Defra is currently consulting on exactly how it will be implemented. Of course, the NPS will be amended to bring it in line with the Environment Act before it is designated.

I welcome the comments from my noble friend Lord Moynihan and my noble friend Lady Foster’s support for the energy NPS. I can assure both of them that the NPS recognises the need for continued investment in oil and gas infrastructure during the transition to clean energy. It was recognised also by the climate change committee that we will continue to need oil and gas infrastructure during the transition. I think some of the simplistic exponents sometimes miss the point that this is a long-term transition. Unless we want to unplug people’s boilers or stop them putting petrol in their car tomorrow, there is an ongoing requirement for investment, and it makes more sense to obtain oil and gas from our own reserves than to import it from Russia, Qatar, Saudi Arabia or American shale gas reserves through the medium of LPG.

I say in response to the noble Baroness, Lady Sheehan, that we believe that the draft NPS strikes the right balance between clarity on the need for the types of infrastructure required to deliver on our climate commitments and retaining security of supply and identifying the potentially negative impacts of such infrastructure at local level. This enables planning decisions to be taken which weigh this national need against these potential impacts, based on expert evidence and, of course, on full stakeholder involvement. Of course, there will always be different views on whether we have got this balance right, and we are currently analysing the responses to the public consultation. We will take account of these and any resolutions or recommendations from the parliamentary scrutiny process before issuing our final response.

The draft NPS reflects the work of the offshore transmission network review and the policy is written to support that work. Future changes will depend on the outcome of the OTNR. The urgency and scale of offshore wind farm development—I remind the Committee that there is to be a fourfold increase by 2030—mean that radial routes to shore are in many cases not viable given the environmental and community impacts.

I say to my noble friend Lady McIntosh that we recognise the desire for a settled siting policy for new nuclear and we are seeking to deliver a robust and comprehensive framework. Three years is the rough working estimate to develop, consult and deliver on an NPS. I can assure my noble friend that a new nuclear NPS will be subject to the same requirements of public consultation and parliamentary scrutiny as these energy NPSs. I can also assure her that the NPSs cover climate change adaptation and mitigation—mitigation is covered by part 2 and new section 5.2 of EN-1.

The noble Baroness, Lady Jones—where to start? In her wide-ranging contribution, I lost count of the number of questions that she asked me. I think I got up to about 25 before I lost count. The noble Baroness will, of course, appreciate that in the context of this short debate it is not possible to answer all her points. I am sure that we will have lots of debates and questions on these subjects in future. Of course, I do not think that any of her questions had anything to do with the subject of this debate, which is on the NPS. I am afraid that the noble Baroness knows that we disagree over this. A lot of her solutions sound great, but they are overly simplistic nonsense in most cases.

In many respects, I agree with the noble Baroness. Of course, we want to see more renewables. We have the largest offshore renewable capacity in the world—and we going to increase it fourfold. It has been a British success story; the price of new offshore wind is now at record low levels. It is a good thing, but it is inherently intermittent. During the recent stormy weather, we saw that wind generation for the UK was up to almost 50% of our capacity, which is great, but a few months ago, when we had a weather depression, we saw wind capacity at about 2% to 3% of our national energy needs. We need a diverse mix of supply—so we need nuclear and existing oil and gas infrastructure and supply and, yes, we need renewables as well.

I do not disagree with the noble Baroness. Of course, we want to see energy efficiency schemes, as energy efficiency is by far the best form of generation; the energy that you do not use is required. We are spending £9.2 billion over this Parliament on energy efficiency and insulation schemes. I am proud of our record. Of course, we can have an argument over whether we should be spending even more, but as regards our levels of investment compared to any previous Government, we are spending record sums on environmental schemes. On ECO alone, the contribution that we are making to that is going up to £1 billion a year, starting in March this year, in addition to the £9.2 billion that we are investing through direct government support. The vast majority of that is going to help fuel-poor households and those on lower incomes to benefit from increased investment and increased energy efficiency in their homes, to make their bills smaller and their homes warmer. That is a key point.

I assure the noble Baroness that we will have time to debate all her many questions and points in future, but I hope that she will forgive me if I do not address all those issues now, because it is not a matter for today’s debate.

In response to my noble friend Lord Naseby, of course we need to preserve our most productive farmland as best we can, which is why the draft NPS continues to advise that the effective use of land is prioritised by focusing large-scale solar farms on previously developed and non-agricultural land, provided that it is not of high environmental value. It also suggests that, when a proposal involves greenfield land, poorer-quality land should be used in preference to higher-quality land.

In response to the noble Lord, Lord Oates, the draft energy NPS set out the Government’s policy for delivering nationally significant energy infrastructure and providing a legal framework for planning decisions at the national level. This includes balancing the need for new infrastructure against the impacts of such infrastructure. It will provide guidance on some of the issues that the noble Lord raised, such as the presumption in favour of underground cables in areas of natural beauty, but many of the important issues raised by the noble Lord, such as energy efficiency and housing, are outside the scope of these documents.

[Lord Oates (LD)]

I am grateful for the Minister’s response, but could he address one specific question that I asked about guidance on community mitigation? This is something that the industry is really clear on—that it needs to have guidance, because it is going to have to bring onshore lots of cable and lots of new energy infrastructure. It really needs clarity from government about what it should be doing there. I would be grateful if the Minister could address that point.

[Lord Callanan (Con)]

During the planning process itself, community mitigations will be taken into account, providing the national framework to enable local planning decisions to be taken. Community mitigations of course play an important part in the planning process.

As I said earlier in response to the noble Baroness, Lady Jones, improving the energy efficiency of homes is the most effective way to permanently reduce energy bills by reducing the amount of energy required to heat the home, and it can tackle fuel poverty in the long term. I covered all the schemes that we have, including ECO, home upgrade grants, the local authority delivery scheme, the public sector decarbonisation scheme and the social housing decarbonisation scheme—myriad different schemes, all contributing quietly and in the background to upping the energy performance of the homes that we all live in.

The noble Lord also mentioned the need for clarity in the approach to CCUS and hydrogen. The NPS establishes the need for CCUS and hydrogen infrastructure, but we do not want prematurely to introduce detailed guidance before we know more about the impact of such projects. We will consider whether to develop a technology-specific NPS for CCUS and hydrogen infrastructure as the technology and the project landscape evolves.

The noble Lord, Lord Lennie, asked how many consent decisions have been made under the current regime. The answer is that 65 decisions on energy projects have been made under the existing suite of energy NPSs. We are, of course, expecting a significant increase in the number of applications as the transition to net zero continues. He also asked about onshore wind. It was removed from the NSIP regime in 2016 through amendments to the Planning Act 2008. This means that all planning applications for onshore wind turbines in England are made to the local planning authority, or to the Welsh Government in Wales. As national policy statements are statutory guidance, and as onshore wind is now not included in the 2008 Act, it was no longer appropriate for the national policy statements to provide specific policies in relation to onshore wind.

Finally, to reply to my noble friend Lady Foster’s point about fracking, it is important to realise that Lancashire is not Texas. The UK is a relatively densely populated island compared to most parts of the US. Although we are not in principle against the idea of fracking, it must be done with the consent of local communities and we need to be aware of its environmental impact. Also, as we discussed during Questions in the House a few weeks ago, it is not the short-term answer that many people think it is. Even if we managed to overcome all the environmental objections, and even if we managed to progress the scheme, it would be many years, if not a decade, before we got meaningful quantities of shale gas out of the ground. Even then, the quantities that we would be able to produce in this country would have no meaningful impact on the overall gas price level. We continue to keep these matters under review, but it does not represent the easy solution that we might like to think it would in this circumstance.