Prax Lindsey Oil Refinery
Michael Shanks Excerpts(2 days, 11 hours ago)
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The Minister for Energy (Michael Shanks)
On 30 June 2025, I made an oral statement regarding the deeply disappointing news that Prax Lindsey oil refinery had entered insolvency, and I made a written ministerial statement on 1 July 2025. I also made a written ministerial statement on 22 July 2025 providing further information on the insolvency process led by the official receiver. Today, I am updating the House on the sale of the site and the assets.
The insolvency process at PLOR is led by the court-appointed official receiver, who must act in accordance with his statutory duties and independently of Government.
After a thorough process to identify a buyer for the site, the official receiver has determined Phillips 66 Ltd is the most credible bidder that can provide a viable future for this site. The sale is expected to complete in the first half of 2026.
Phillips 66 is an experienced and credible operator, and this sale allows it to quickly expand operations at its neighbouring Humber refinery, with all remaining 250 staff guaranteed employment until the end of March 2026.
Phillips 66 plans to integrate key assets into its Humber refinery operations. This will expand Phillips 66’s ability to supply fuel to UK customers from the Humber refinery, boosting domestic energy security, securing jobs including hundreds of new construction jobs over the next five years, and driving future growth opportunities for renewable and traditional fuels.
This agreement marks the next step in securing an industrial future for the site and the workers, who were badly let down by their former owners.
The former owners left the company in a poor state and gave the Government very little time to act. That is why the Energy Secretary immediately demanded the Insolvency Service launch an investigation into their conduct and the circumstances surrounding insolvency. That investigation is ongoing.
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Energy Infrastructure National Policy Statements
Michael Shanks Excerpts(2 days, 11 hours ago)
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The Minister for Energy (Michael Shanks)
I laid three updated energy national policy statements before Parliament for parliamentary approval on 13 November 2025: EN-1 (the overarching NPS for energy), EN-3 (renewable energy infrastructure), and EN-5 (electricity networks infrastructure). I am therefore pleased to inform Parliament that I am today publishing them as national policy statements under the provisions of Section 6(9)(a) of the Planning Act 2008, and laying copies before you as required by Section 6(9)(b) of the same Act. The statements are made under the Planning Act 2008, which applies to England and Wales.
The updated national policy statements support Government’s clean power 2030 mission and our efforts to build an energy system that meets clean power by 2030 and net zero objectives. These national policy statements provide clarity for industry and stakeholders on the Government’s clean power mission and are pivotal to our reforms to provide the UK with clean, affordable energy security.
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Nuclear Energy Infrastructure National Policy Statement
Michael Shanks Excerpts(3 weeks ago)
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The Minister for Energy (Michael Shanks)
Today I am pleased to announce we have designated the national policy statement for nuclear energy generation, EN-7, according to the Planning Act 2008. EN-7 now provides the planning framework for all nationally significant infrastructure projects proposing to use nuclear fission to generate energy, replacing EN-6, which applied to projects deployable by the end of 2025.
This marks an important milestone in delivering our ambition to make the UK a clean energy superpower, in part through an expansion and diversification of the UK nuclear energy industry. The designation of EN-7 builds on the momentum of recent Government action, including the publication of the Prime Minister’s strategic steer to the nuclear sector following the report from the nuclear regulatory taskforce. Our implementation of the report’s recommendations will shape a modernised, more agile regulatory environment, while maintaining the UK’s high standards of safety, security, and environmental protection.
Alongside EN-7, we will be publishing the EN-7 supplementary information. This document clarifies the planning and regulatory requirements for nuclear energy projects, helping applicants to navigate the process for applying for development consent, and to engage effectively with regulators and expert consultees. By providing practical advice, the supplementary information aims to streamline project delivery, reduce uncertainty, and support robust safety and environmental standards. It will be updated regularly to reflect stakeholder feedback, ensuring it remains a valuable resource for all involved.
The EN-7 and supporting documents, including the EN-7 supplementary information, are available on gov.uk.
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Draft Oil and Gas Authority (Carbon Storage and Offshore Petroleum) (Specified Periods for Disclosure of Protected Material) Regulations 2026
Michael Shanks Excerpts(3 weeks, 2 days ago)
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The Minister for Energy (Michael Shanks)
I beg to move,
That the Committee has considered the draft Oil and Gas Authority (Carbon Storage and Offshore Petroleum) (Specified Periods for Disclosure of Protected Material) Regulations 2026.
It is a pleasure to serve under your chairship, Ms Barker. I apologise in advance to the Committee for my voice; I am full of the joys of the season, which are going around this place at the moment. I hope we get through this in one go.
The draft regulations were laid before the House on 24 November under the affirmative process. Like so much of what I seem to bring to these Committees, the draft regulations may appear technical, but they are hugely important. They are essential to the effective sharing of data within UK carbon capture, usage and storage and the offshore petroleum industries—data that underpins collaboration, transparency and innovation, all of which are critical to advancing our energy security. The data-sharing rules set out by the regulations will support the effective use of the UK’s carbon storage capacity and the contribution that it can make to delivering the Government’s mission to make Britain a clean energy superpower and accelerate our journey to net zero.
Carbon capture, usage and storage is a set of emissions reduction technologies designed to prevent carbon dioxide from being released into the atmosphere. Carbon dioxide captured from a range of sources, including power generation and industrial processes, will be transported for permanent storage offshore, deep underground, rather than being emitted into the atmosphere. Complementing our transition to home-grown clean energy, not only is CCUS essential to meeting our climate commitments, but it will safeguard our energy security and decarbonise power and industry in a way that drives economic growth.
The Oil and Gas Authority, now operating under the business name of the North Sea Transition Authority, regulates the secure permitting of carbon dioxide stores on the UK continental shelf. That means that anyone who wishes to explore for, or use, a geological feature for the long-term storage of carbon dioxide on the continental shelf must hold a carbon storage licence issued by the NSTA.
As set out in the Energy Act 2023, carbon storage licensees are responsible for complying with various obligations, including the reporting to the NSTA of information and samples obtained through the conduct of licensee activities. In our view, the wealth of data that carbon storage licensees gather during exploration or storage activities is a national resource, and its publication will accelerate the deployment of CCUS in the UK. That is why we introduced the Oil and Gas Authority (Carbon Storage) (Retention of Information and Samples) Regulations 2025, another thrilling statutory instrument, which came into force in May. Those regulations specify the types of information and samples that carbon storage licensees must retain and the periods for which they must be retained. These requirements ensure the preservation of valuable data on carbon storage activities on the continental shelf.
The draft regulations set out when the NSTA can publicly disclose carbon storage information and samples provided to it by carbon storage licensees, and which types of information and samples may be so disclosed. They will also amend when the NSTA can publicly disclose information on the drilling or operation of wells under offshore petroleum licences; the timeframe for that was set out in the Oil and Gas Authority (Offshore Petroleum) (Disclosure of Protected Material after Specified Period) Regulations 2018. This amendment to the 2018 regulations will bring the NSTA disclosure powers across CCUS and offshore petroleum into alignment.
Information and samples play a significant role in the UK carbon dioxide storage industry. Access to high-quality data for the NSTA, industry, academics and the public will help to deliver efficient ways to utilise the UK’s storage potential. The carbon storage information and samples published will support the sharing of knowledge and lessons learned, including best practices and innovation, ultimately leading to cost reductions and the overall advancement of the sector. That includes accelerating the North sea’s energy transition. The NSTA helps to drive that transition by realising the significant potential of the UK continental shelf as a critical energy and carbon abatement resource. The draft regulations will further provide opportunities for the industries based offshore, with very significant potential for storing carbon dioxide in the depleted oil and gas fields and other geological formations on the UK continental shelf.
The NSTA consulted on the carbon storage and the offshore petroleum aspects of the regulations—under the previous Government, I might say. The consultation on the amendment to well data confidentiality closed in 2022; a response was published in 2023. The consultation on the proposed regulations for the disclosure of carbon storage information closed in April 2024; a response was published in October 2025. Feedback from both was positive and has been carefully considered to ensure that the draft regulations reflect industry needs and best practice.
CCUS is critical to the UK’s future energy security and to our industrial ambitions. The draft regulations may be technical, but they are imperative and will enable a wealth of data to be made accessible, which will ultimately support the advancement of the CCUS industry and the future of industries on the UK continental shelf. I commend them to the Committee.
Michael Shanks
It is always a pleasure to end the year on a high with the shadow Minister agreeing with the Government. I wish it happened more often.
Michael Shanks
I think the shadow Minister was actually congratulating his own work when he was in my role several years ago, but it is a treat nevertheless. I thank him for his support and echo his comments about the NSTA; its primary role is that of a regulator, but it also does a phenomenal amount of work to bring the industry together to look at how it improves on its practices. I also echo his thanks to Stuart Payne and the team for their work.
I turn to the shadow Minister’s questions. First, our purpose is not just to bring both sets of regulations into alignment; it is also important to recognise that a lot of the decommissioning work is moving further and further to the right. It will be a huge economic opportunity for us if we can ensure that that work happens. This is partly about making sure that the regulations are aligned, but it is also about ensuring that action can be taken against those who are not meeting the deadlines. Beyond the draft regulations, wider work is going on to ensure that we are enforcing our expectation of decommissioning work being concluded, not least because the public will end up on the hook for many of the costs if that work is not done.
On the question about the administrative burden, we look at these issues in the round, but there were consultations with the industry in 2023 and 2024 and no objections were raised by industry bodies. I think we had 11 responses, including three from industry representative bodies and five from individual companies, and overall the consultation received a positive response, so our sense is that the draft regulations will be warmly welcomed.
On the specific question of enforcement, one of the issues that we addressed in the North sea plan was how we will look at the enforcement powers of the NSTA. We will say more about that when we introduce legislation in due course.
I welcome the support for these measures, and indeed the work of the previous Government on setting up the landscape for carbon capture and storage. It is a huge opportunity for our country, and we look forward to moving it forward.
Question put and agreed to.
Small-scale Fracking Ban
Michael Shanks Excerpts(4 weeks, 1 day ago)
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The Minister for Energy (Michael Shanks)
It is always a pleasure to serve under your chairship, Sir Roger. I thank my hon. Friend the Member for Scarborough and Whitby (Alison Hume) for securing this debate, for her fantastic speech and for all her campaigning on this issue and many others since she was elected. She is a fantastic champion for her community. I also thank her for all the conversations we have had on this issue.
My hon. Friend the Member for Scarborough and Whitby noted the importance of this Government’s climate commitments. I think it is useful to restate those for context. In the face of a fractured consensus—pardon the pun—this Government are absolutely committed to tackling the climate emergency. That is why our clean power mission and everything we are doing in Government is about getting us off the rollercoaster of fossil fuels as quickly as possible. It also means managing the role that oil and gas plays in the country at the moment.
Just a fortnight ago we published our response to the consultation on the future of the North sea—our “North Sea Future Plan”—which includes not just the future actions in the North sea, but our approach to the onshore oil and gas sector. We have set an ambitious and pragmatic approach to cease new oil and gas licensing and explore new offshore and onshore fields while managing existing fields for their lifespan; I will come back to that point later. That is all about helping manage our transition from fossil fuels—what we have to do for climate change—but also how we invest in what comes next and the clean energy that will bring down people’s bills and deliver our energy security.
I have listened closely to the points made by my hon. Friend in today’s debate, and in the correspondence that I have had with her and our other meetings. My Department has also been aware of these concerns through correspondence from other Members in this place and the recent e-petition that was considered. I want to be clear on this Government’s position towards hydraulic fracturing—both high-volume hydraulic fracturing for shale gas and more conventional low-volume hydraulic fracturing.
Regarding high-volume fracturing for shale gas, the Government have committed to end fracking for good, as my hon. Friend noted. On 1 October, my right hon. Friend the Secretary of State announced legislation that will be introduced soon to end new onshore oil and gas licensing in England, including new licences that could be used for high-volume hydraulic fracturing for shale gas, which is commonly understood as fracking.
My hon. Friend the Member for York Outer (Mr Charters) made a powerful point about our opponents in this debate. The idea put forward by Reform that we should not only not continue with our moratorium, but embrace fracking as a form of energy and start doing it all across the country, goes into the bucket with so many of their policies that are backward, dangerous and ill-conceived. We will absolutely reject that approach and we will legislate to make sure that our commitment will stand in the statue books for the future.
There is already an effective moratorium on high-volume hydraulic fracturing for shale gas—fracking—in England, and that will continue to apply to all existing licences. That is in place because of concerns that were raised around the prediction and management of induced seismicity in that type of fracturing. There are similar restrictions in place in other parts of the UK; taken together, that existing moratorium for currently licensed fields and the end of licensing for new fields means that no fracking for shale gas takes place anywhere in the country, and no new licences will be granted that could be used for that in the future.
The point made by my hon. Friend the Member for Scarborough and Whitby is about low-volume hydraulic fracturing, which has been the focus of today’s debate. I want to be clear that this Government make policy based on evidence. Although I have listened very closely to her points today and in the past, the evidence base is not there at the moment to suggest that low-volume hydraulic fracturing activities have the same associated risks as fracking for shale gas.
A small number of those activities take place—including, for example, proppant squeezes at volumes lower than the thresholds for fracking generally, as currently defined in legislation. The small number of those activities are not currently in scope of the effective moratorium that is in place. She rightly asked whether I would consider a review of that definition; of course, I keep all these things under review, and I am very happy to continue to review new evidence as it comes forward, but any change has to be based on evidence. We have to see additional evidence to what we have reviewed on the definition, but that is not there at the moment.
Low-volume hydraulic fracturing activities under existing licences take place in the context of conventional oil and gas operations. They require a range of permissions and consents before they can be undertaken, which include planning permission from the relevant local authorities and the necessary permits and consents from the North Sea Transition Authority, the Environment Agency and the Health and Safety Executive. That system ensures that operations meet the safety and environmental standards and obligations set out in law, and activities will be approved only if each of those stages is positively completed.
My hon. Friend noted the point about existing licences, and I want to reiterate what our manifesto said. There were two parts to that commitment: we said that we would not issue new licences to explore new fields—we will legislate for that soon—but that we would not revoke existing licences. It is the Government’s position that existing licences are in place and we do not intend to rescind them.
This is clearly a complex issue. I understand, as my hon. Friend has raised today, that there are real concerns from communities about any of these kinds of projects. Although the evidence base is important for us to make decisions here, I do not discount for a second the concerns that communities have. I want to hear those concerns from across the country. I remain very open-minded, as does my right hon. Friend the Secretary of State, to new evidence coming forward to look at this definition, but for obvious reasons, it is important that the Government make policy decisions based on evidence that can stand up to scrutiny if ever challenged in court. That evidence base is critical.
Mr Charters
In that evidence, will the Minister include water scarcity? In York and across the region, people have not been able to fill up a paddling pool, so why should water be used in low-volume fracking?
Michael Shanks
I appreciate that point; I am sorry for not mentioning it earlier, as my hon. Friend made it before. It is an important point, and we need to look at water scarcity right across the policy landscape. Demand for water is increasing in a number of areas—for example, I am looking at it in terms of data centres at the moment. The Government must look at the uses of water, as well as building new reservoirs to ensure we have water supply. That is an important point that will be taken into consideration by the Environment Agency and as part of the local planning process, but I will take it away and see whether there is anything more we can do on that.
The Department and I are keeping low-volume hydraulic fracturing under active review. We are open to receiving objective evidence, wherever that may come from; we will review that and look at whether definitions need to change and whether other legislation is required, but the position is as I have set out at the moment. I thank my hon. Friend the Member for Scarborough and Whitby again for bringing this debate to Westminster Hall, and other hon. Members who have participated. I appreciate the engagement on the issue, which I am confident that my hon. Friend will continue. I look forward to that.
Question put and agreed to.
Net Zero Transition: Consumer-led Flexibility
Michael Shanks Excerpts(4 weeks, 2 days ago)
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Jim Shannon (Strangford) (DUP)
It is always a pleasure to serve under your chairship, Mr Vickers. I thank the hon. Member for Thornbury and Yate (Claire Young) for leading this debate and for setting the scene incredibly well. It is always a pleasure to see the Minister in his place; I look forward to the helpful and positive remarks he always makes. It certainly gives a lift when he answers the questions, and I am quite sure he will do likewise today.
Jim Shannon
No, no—upwards! Everything upwards. It is also a pleasure to see the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith), in his place and I look forward to his contribution as well.
Consumer-led flexibility is so important. It refers to ordinary households and small businesses adjusting their energy use to support a cleaner and more resilient energy system. Who does not want that? It is about how we make it happen, however, and whether there is a cost factor to it. Can people make the changeover—the transition, so to speak—in a way that achieves the goals but does not inhibit their pocket financially in the way it sometimes might?
The cost of energy has been such a huge issue nationwide. I know from my constituents that it is a real problem. The two things that affect them more than anything else are the price of foodstuffs and the cost of energy. Especially as we head into winter, the cost of energy becomes a critical factor. It is about balancing one’s income at the end of the month to ensure that all those things are covered. For my constituents, that is a real problem with increasing costs and consumption, so it is good to have an opportunity to represent them in this Chamber today.
I always add a Northern Ireland perspective to the debate, and I know that the Minister always endeavours to reply to us in Northern Ireland on how Westminster can help, so it is important to put that on the record. For a just transition in Northern Ireland, any move to low-carbon energy systems must be fair, affordable and supportive of communities reliant on older heating fuels.
The Minister for Energy (Michael Shanks)
It is a pleasure to serve under you today, Mr Vickers. I am frequently told that consumer-led flexibility does not get enough time, but I now have almost an hour to talk about the Government’s plans on it. I intend to use every moment I have.
Michael Shanks
No, I don’t intend to—do not worry, colleagues.
This is an important debate, however, and I thank the hon. Member for Thornbury and Yate (Claire Young) for securing it. She made a point that those in the industry make regularly to me: that this is too often a footnote in the discussion about achieving our future energy security. It should not be. It should be much further up the agenda. It is not for want of trying; I often talk about it, but it is regularly the bit that gets cut out of interviews before they are broadcast. The Government are certainly talking about these issues.
The hon. Lady outlined perfectly the problem of how we get cheaper, more secure power to homes and businesses, and the three fixes: building more grid, strategically planning where energy is built in the first place, and utilising flexibility. The truth is that we need to do all three at a pace never before seen in this country. I will come back to those points, but I welcome her recognition of them.
My hon. Friend the Member for Washington and Gateshead South (Mrs Hodgson) made a fantastic speech, as always. She is a fantastic champion for the north-east and a long-standing campaigner on the issue of how we can reduce fuel poverty. She made the point that we risk losing the opportunity of getting cheaper power to people’s homes and bringing down their bills, and she mentioned the fantastic innovations out there already. I have had the pleasure of seeing a number of them. When I visited the Mining Remediation Authority recently, I had the genuine pleasure of hearing about the mine water heating scheme. That is a fantastic example of how we can utilise something that we used decades ago to power the country. There is also a social justice argument, as those communities who still have deep scars from that period can benefit from cheaper bills in the long run.
I also want to recognise the point the hon. Member for Thornbury and Yate made about the equality aspect and how we will bring everyone with us on this transition. I will return to that point, but first I want to return to first principles and say why the Government are committed to delivering clean power by 2030. At the heart of that mission is an energy system that delivers flexibility for consumers: not forcing consumers to make choices, but giving them the opportunity to make choices that bring their bills down, and to use technology for the betterment of their lives in a way they choose.
The clean power action plan outlined 10 GW to 12 GW of consumer-led flexibility. I think that in the months ahead we will be talking much more about that part of the action plan. The Government have had to move very quickly in the first 16 months to deliver on the auctions in offshore and onshore wind, to lift the ban on onshore wind and to deliver much more solar than we have ever seen, but flexibility has been hugely important in the background, and we will say much more in public about it in the coming months.
Let me respond briefly to the core argument that the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith), made about the clean power mission:
“The UK is a world leader in renewable energy…and we must go further. Energy security means national security. We must replace imported fossil fuels with cheaper, cleaner, domestic sources of energy. That is how we will ensure that the UK never again suffers the rising prices caused by Putin’s weaponisation of energy following his invasion of Ukraine.”—[Official Report, 22 November 2023; Vol. 741, c. 21WS.]
Those are not my words, but the words of the shadow Secretary of State, the right hon. Member for East Surrey (Claire Coutinho), in November 2023. I am not quite sure what has happened to the Conservative party in two years, but the Conservatives seem to have completely changed not just their position, but their understanding of the facts and science behind what they were saying then. The right hon. Member, who was Secretary of State at the time, made my argument just as well as I could ever seek to. I will leave it at that.
A just transition has the power to unlock enormous benefits for people right across the country. It is why we have pledged to deliver clean power, because we know it is cheaper and it removes the volatility of which all our constituents are still facing the cost. It will shield consumers from the volatility in global gas prices, over which we have absolutely no control, but it will also create new jobs in industries right across the country. It is the economic opportunity of the 21st century.
The role of storage will be important. The hon. Member for Newton Abbot (Martin Wrigley) talked about a school trip to Dinorwig; in Scotland, I think every single school child went to Cruachan, the hollow mountain, which is another pumped hydro power station. Although pumped hydro may be a technology from the last century, it is critical in this century as well. Indeed, the Government have launched the first new long-duration energy storage in 40 years. It is a critical way of dispatching clean power and storing it for when we absolutely need it, so it still plays an important role.
Consumer-led flexibility will play an important role in getting renewable energy to people’s homes. It will help us to balance the grid and ensure that we have supply when we need it. It enables us to take advantage of low-carbon energy and reduce periods of peak demand and the associated infrastructure needs. It also involves financial rewards for those who choose to shift their electricity use to times when supply is more abundant, cheaper and cleaner. Smart meters are a key part of that. As we all know from our constituencies, we would all have liked to see a more efficient roll-out of the smart meter programme over the years, but 70% of meters across Great Britain are now smart or advanced meters, with more than 40 million homes and businesses having them installed.
We will continue to monitor the roll-out in Government very closely. Indeed, I chair a working group that is looking at how we can deliver market-wide half-hourly settlements much faster. That is really important so that consumers and businesses benefit directly from having a smart meter and new technology.
Jim Shannon
I thank the Minister for the positivity of his answers. The take-up of smart meters in Northern Ireland has not been good at all—nowhere near expectations. In his discussions with the relevant Minister in Northern Ireland, what can be done to help us to do better back home?
Michael Shanks
I will come to the hon. Gentleman’s point. I always appreciate the kindness of his contributions, although he needs to lower his expectations of mine. He rightly mentioned the statistic that 68% of households in Northern Ireland have oil heating, which he raised with me in a previous debate. That figure surprised me, and it is a reminder of the complexity of the different circumstances across the United Kingdom of Great Britain and Northern Ireland. I work closely on this issue with Northern Ireland Executive colleagues in the Department for the Economy, and we share much of our good practice to make sure that everybody comes with us on this journey. I will shortly say more on the hon. Gentleman’s point about gas.
We are already seeing consumers benefiting from flexibility. Last year, the demand flexibility service saw over 2 million households and businesses save money by flexing their demand. We are committed to ensuring that all consumers have the option to participate, not just those who can afford certain technologies. The Government have committed £1.5 billion through the warm homes plan, which will help to upgrade low-income households. The Government will also work to ensure that flexibility is simplified and accessible for all consumers who want to take part, not just the tech savvy and those who are already able to. We have to remember that flexibility brings down the price for everyone, even those who are not participating, because of the benefits it brings to the overall system.
As we shift away from gas, consumer-led flexibility will become even more vital for managing an electrified system. Crucially, it will bring down bills for all consumers, not just those who actively participate. The Liberal Democrat spokesperson, the hon. Member for Newton Abbot, gave a figure on the direct benefit from consumer-led flex, and a more flexible system is estimated to save up to £10 billion a year overall because of that efficiency. It is hugely important.
The hon. Member for Strangford (Jim Shannon) asked about the transition. Obviously, connecting to the gas network is difficult in Northern Ireland, and this is a huge opportunity for many households to jump a step—from oil heating to heat pumps and other technologies. There is a real opportunity for those households to benefit, perhaps even more than some other households, if we get the transition to consumer-led flex correct. I look forward to more conversations with the hon. Gentleman on that issue.
The other point I want to make is about the role of technology. Consumer-led flexibility is becoming increasingly automated, which means that consumers can benefit from these opportunities with little or no intrusion in their daily lives. Indeed, I have seen examples where consumers have set up technology and let it run for months at a time. For example, an EV owner can plug their car into a smart charger, which will optimise charging so that it happens at the most cost-effective times of the day, while still meeting the battery charge they need the next morning, saving a significant amount of money.
I recently had a great opportunity to visit Flexitricity in Edinburgh, which is a fantastic business—not least because it has a fantastic view of Edinburgh castle, although that was not my reason for visiting. My visit brought home two things: first, the cutting-edge technology and innovation that we already have in this space; and secondly, how this is an opportunity to create high-paid, skilled jobs across the country. I met a number of apprentices and people who had changed career to be part of that innovation—the business is a fantastic example. I thank the Association for Decentralised Energy, some of whom I see in the Public Gallery today, for joining me on that visit and for the work they do.
We recently published the flexibility road map, which sets out specific, measurable actions for DESNZ, Ofgem and NESO to deliver the flexibility we need. The road map sets out a strategy and clear actions to make sure we can deliver on this. It acknowledges that the Government, in partnership with Ofgem and NESO, will need to take a leading role in making sure this is a priority for those organisations. The publication puts consumers at the heart of what we want to achieve.
The road map is a first step. To deliver it, we know we have to sustain that momentum. As many hon. Members have said, agreeing that this is the right thing to do is not enough; we have to get on with delivery. This debate is perfectly timed, because this afternoon I will attend the first clean flexibility road map quarterly forum to make sure we are driving progress on this. That was already in the diary, but this debate is perfect timing.
I thank the ADE for all its engagement and expertise on this matter, and I thank all the organisations working in this space for raising innovative and creative ideas for how we can make this happen faster. This is an area where the Government do not always know best, and the innovation from the private sector and communities across the country will help us to deliver this transition. It is crucial that the Government continue to hear that, and that we continue to be challenged to move further and faster.
We have seen good progress on leadership, which goes hand in hand with our work on the road map and on the appointment of a flexibility commissioner. We will be able to announce who we are appointing very soon, and they can then get on with driving this work forward as part of the clean power mission. Leadership is important more generally in this space. As politics moves away from a fact-based, rational discussion of the challenges this country faces, it is ever more important that we have these debates on the detail of how we deliver such important policies.
We must also recognise that we are making progress. There is sometimes a tendency to think that nothing is happening, but a huge amount is happening: the migration of consumers to half-hourly settlement has begun and is making great progress; NESO is about to consult on the next iteration of the demand flexibility service; Ofgem is assessing how to recover costs through bills in a way that is fair and efficient; and we have consulted on our smart secure electricity systems programme, including how we can make it easier for electricity consumers to participate. All that work going on in the background will start to have a real impact on people’s lives in the coming months.
I thank everyone for their contributions to this debate. The Government are committed to delivering a clean power system, because that is the only way to bring down people’s bills in the long run, to remove the volatility of fossil fuels, for which we are paying the fossil fuel penalty, and to deliver energy security in an increasingly uncertain world. Flexibility is at the heart of this, and for us to have a genuinely just transition—one that brings people with us—we have to do what is challenging. This is a new way of working. It is different, and it will require people to think differently about their energy use and about how we deliver the change as a country, but opportunity is right at the heart of this—we should never forget that opportunity is the prize if we achieve this.
We will continue to work across Government and across the energy sector so that people can take advantage of the benefits of consumer-led flexibility and so that, ultimately, we end up with a 21st-century energy system that recognises that all our lives have changed in the last few years in how we consume electricity. Every single projection suggests consumption will increase over the coming years, so it is hugely important that we take these steps now so that the people of this country benefit from the energy transition that is under way.
I thank everyone again, and I thank the hon. Member for Thornbury and Yate for securing this important debate.
Martin Vickers (in the Chair)
I thank the Minister for not taking the full 50 minutes available, which leaves more than the usual two minutes for Claire Young to wind up.
Capacity Market: Prequalification 2026
Michael Shanks Excerpts(1 month ago)
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The Minister for Energy (Michael Shanks)
I am tabling this statement to inform members of the publication of a consultation relating to the capacity market titled “Consultation on proposals to integrate low carbon technologies and enhance delivery assurance ahead of Prequalification 2026”.
The consultation supports our objectives of delivering clean power by 2030 and accelerating progress towards net zero, while ensuring security of supply.
Since its introduction in 2014, the capacity market has acted to secure sufficient capacity to ensure consistent and reliable electricity generation in Great Britain. The funding provided through the capacity market scheme incentivises investment in new and existing generation, interconnectors, batteries, and consumer-led flexibility mechanisms to ensure sufficient capacity is available to meet future demand when required. This capacity is acquired through competitive annual auctions held at intervals four years ahead and one year ahead of their respective delivery years. The Government regularly amend the framework underpinning the capacity market before auction cycles to ensure it is cost-effective and meets broader strategic objectives such as clean power by 2030.
The consultation we are publishing today includes several proposals intended to maintain electricity security, keep the capacity market’s impact on bills as low as possible for consumers, strengthen delivery assurance of low-carbon technologies, and improve the overall functioning of the scheme.
We are seeking views on changes to the capacity market which would achieve the following aims:
Managing the transition for existing generating capacity market units from the CM to a contract for difference following a Secretary of State direction, without allowing support from both schemes to be received at the same time. This would ensure value for money for consumers and would allow existing capacity to continue participating in the scheme. The change recognises the strategic importance of these assets for the UK’s energy transition and to security of supply.
Capturing interactions between the long duration electricity storage cap and floor scheme and the CM by introducing appropriate eligibility criteria for these projects to support low-carbon technologies while avoiding market distortions. The LDES cap and floor provides revenue certainty to accelerate the deployment of storage critical for a secure, low-carbon grid in line with its expansion in the 2030s. By mirroring the successful interconnector model, the cap and floor scheme guarantees developers a minimum revenue while capping excessive returns to ensure value for consumers.
Strengthening the CM delivery assurance framework by proposing two approaches to making the termination framework in the CM more stringent: either raising all fees by 30% in line with inflation from 2016 to today, or by simplifying the regime to have one fee, set at £45,500/MW, to reflect inflationary changes to the current highest fee since 2016. Both approaches improve the regime by disincentivising capacity providers from seeking to end their agreements via termination. The second option has the additional benefit of reducing the ability of capacity providers to seek alternate termination events that carry a lower fee by artificially creating the circumstances for a termination, for example by using shell companies to trigger issues regarding ownership of assets of grid connections. We are also proposing to hold credit cover until a new build CMU has completed commissioning their CMU in order to further incentivise capacity providers to build their CMUs and fulfil their obligations. Credit cover will be increased to align with the new uprated termination fee levels.
Amending CM rules on the secondary trading market to increase clarity in the CM rules.
Introducing additional measures for multiple price capacity market eligibility to ensure eligible capacity provides genuinely new capacity and offers value for money. This includes a new requirement to meet a higher capital expenditure threshold in order to qualify for the second, higher price cap. In addition, eligible capacity will be required to provide evidence of a certificate of disconnection where new builds are located on a previously commissioned site. The delivery body will also have the ability to request additional evidence to ensure all projects, whether eligible for the MPCM or not, are meeting the necessary total project spend requirements.
The proposals put forward in the consultation seek to ensure the capacity market continues to meet its primary objective of ensuring security of supply, remains fit for purpose and continues to play a crucial role in achieving the clean power mission.
[HCWS1117]
Oral Answers to Questions
Michael Shanks Excerpts(1 month, 3 weeks ago)
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Jeff Smith (Manchester Withington) (Lab)
The Minister for Energy (Michael Shanks)
Thanks to the success of the initial scheme, Great British Energy is expanding the roll-out of solar panels for public services. Now, 50 more schools, 60 more NHS sites and 15 military sites will have their bills cut thanks to this Government, transferring money from the pockets of energy companies back into frontline services.
Jeff Smith
I warmly welcome the announcement of solar panels at Ladybarn primary school in Withington—it is great news for an excellent school in my patch and good news for the planet. I have also seen good investment in solar panels on hospital buildings in my patch, and we clearly need to scale that up. How can having Great British Energy as a publicly owned company help us to do that?
Michael Shanks
I congratulate those at Ladybarn primary school in my hon. Friend’s constituency on receiving solar panels. The benefit for the school is that it can spend more money on the things that are important for improving young people’s learning, rather than on its energy bills. Great British Energy is our idea for a publicly owned energy company—the first in 70 years—that will drive forward investment in the clean power transition and in supply chains, creating jobs across the country and bringing down bills for the public sector, as in these examples in the NHS and at military sites and schools, so that we can invest more in frontline services.
Mr Will Forster (Woking) (LD)
A constituent of mine wants to replace his gas boiler with renewable energy, which will cost him around £400. I am concerned by the prohibitive costs, which massively undermine our net zero ambitions. Can the Minister confirm what he and his Government are doing to remove those prohibitive costs?
Michael Shanks
We are working to reduce those costs. In fact, it has been announced just today that the boiler upgrade scheme will be made more accessible so that people can take advantage of renewable technologies. We want people to be able to bring down their own household bills. Of course, that also helps us as a country to move towards a clean energy system, which we know is what will bring down bills in the long run. We are doing work across Government to bring down those costs. There will come a tipping point very soon where it is much more economical to install those technologies than the alternatives, and that is when we will realise huge benefits for households right across the country.
Laura Kyrke-Smith (Aylesbury) (Lab)
Dr Allison Gardner (Stoke-on-Trent South) (Lab)
The Minister for Energy (Michael Shanks)
We are delivering the biggest nuclear building programme in a generation, overturning the legacy of the Conservatives, who failed to complete a single project in their 14 years in office. Just this week, we announced that the flagship small modular reactor project would be based in Wylfa, bringing thousands of jobs to north Wales and also right across the country in the supply chain. Great British Energy Nuclear’s ambition is that 70% of supply chain products across the SMR fleet will be British built.
Dr Gardner
Advanced ceramics and ceramic matrix composites play a critical role in the manufacturing of nuclear infrastructure. They are used in nuclear fission reactors as pellets, ceramic coatings are applied to small modular reactors, and ceramics are needed in fuel particle coating, moderators, reflectors and control rods. North Staffordshire is a hotbed of advanced ceramics manufacturing, and I ask the Minister to ensure that our local companies receive investment as part of the nuclear modular reactor scheme to ensure supply chain resilience.
Michael Shanks
My hon. Friend is a fantastic champion of her community and of the potential of businesses in her community to contribute to this. We have been clear as a Government that we want UK supply chains to benefit from these projects and to deliver their world-leading expertise across all our civil nuclear projects, including the SMR programme, Hinkley Point C and Sizewell C. To achieve this, we will continue to engage with industry right across the country and to address any barriers to entry into the nuclear sector, particularly for small and medium-sized enterprises who might not know exactly how to enter the supply chains, to ensure that they are in the best possible place to take advantage of the huge number of opportunities that will be created by this new golden age of nuclear in the UK.
Mr Gregory Campbell (East Londonderry) (DUP)
The Minister has outlined his determination and urgency on nuclear power. I hope he is able to confirm that everyone across the United Kingdom will benefit from lower costs as a result of the construction of mini nuclear reactors.
Michael Shanks
We know that to bring down bills for everyone, we need a clean power system that includes nuclear providing the stable baseload across the country. That also benefits Northern Ireland through the interconnectors, but obviously energy decisions are reserved in Northern Ireland. We are committed to bringing down the cost of these projects as much as possible, and also to ensuring that we get the economic advantages. When these projects are on the system, they will deliver clean, secure power made here in the UK for generations, and that is how we will deliver energy security and get us off the volatility of fossil fuels, which is what has been driving up bills for the hon. Gentleman’s constituents and mine for so long. This is the answer for our energy security and for good jobs right across the country.
Gordon McKee (Glasgow South) (Lab)
The Minister for Energy (Michael Shanks)
Clean power is the route to energy security and energy independence for the United Kingdom. For far too long, families have faced high energy bills thanks to our exposure to international fossil fuel markets over which we have no control. Through our clean power mission, we are ending that situation by rolling out clean, home-grown power that we control.
Gordon McKee
Since Vladimir Putin’s full-scale invasion of Ukraine, energy bills have gone up because we are reliant on international gas markets. That means that families in Glasgow are paying more for their heating because of factors totally outside their control. What are the Government doing to ensure that Britain has control of its own energy supply?
Michael Shanks
My hon. Friend is right to say that his constituents in Glasgow—and constituents right across the country—have faced sky-high energy bills because of our exposure to fossil fuels. Although very little Russian gas came into our system, we remained exposed to the volatility of the international markets.
The Opposition want us to go back to the fossil fuel casino and hope that this time we get a better hand, but we are determined to protect the public of this country in the long run from those price spikes and to ensure that we have energy security because of clean power grown here in the UK, delivered by jobs that we are investing in. That will help to remove the volatility that so many of our constituents have faced for too long—energy security, good jobs and tackling the climate crisis.
Harriet Cross (Gordon and Buchan) (Con)
Energy sovereignty and energy security are vital, and gas will play an important role in that for years to come, but our domestic production is falling because of this Government’s policies. Imports of liquefied natural gas are up by 40% this year, and domestic production is meant to get to 25% by 2030. We must support domestic production, and to do that the Government must scrap its policy of an increased energy profits levy and open up new licensing. When will the Government do that, and when will they support jobs, investment and domestic production from the North sea?
Michael Shanks
The hon. Lady is right: domestic production is important, which is why we have said that for decades to come, oil and gas will continue to be part of our energy picture in the UK. The number of imports has been increasing for a long time—it is not a recent trend. The North sea has been in transition for decades, and we must build up the energy that comes next. On her specific question, we consulted on what the future of the energy profits levy will look like. It comes to an end in 2030, and it is a matter for the Chancellor at the Budget. On the future of the North sea generally, we had a wide-ranging consultation, including on the future licensing position, and our pragmatic plan will be published in the coming weeks.
Lisa Smart (Hazel Grove) (LD)
The Minister for Energy (Michael Shanks)
Through Great British Energy’s local power plan, we are rolling out the biggest expansion of community energy for decades. We are supporting projects with funding through the community fund, and Great British Energy will also support communities to roll out small and medium-scale renewable energy projects by providing commercial, technical and project planning assistance. That will increase its capacity to build a pipeline of successful projects owned by local communities.
Lisa Smart
More community energy is obviously good for the planet and for the pockets of bill payers, and it is certainly good for our energy security. The amazing volunteers at Stockport Hydro, Greater Manchester’s first hydroelectric producing plant which is in the River Goyt in my Hazel Grove constituency, tell me about the problems they are having with the Environment Agency stopping them doing their work. They were kept waiting for 227 days for the result of a licence inspection, and they have struggled to get information from it. A lead volunteer told me that if the EA continues in this way, community energy is “doomed”. What conversations is the Minister having across the Government to ensure that community energy delivers the clean power that we need?
Michael Shanks
I thank the hon. Lady for that question, and pay tribute to all those involved in Stockport Hydro for the work they are doing. Clearly, it has been too much of a challenge, and we need to make it easier. Alongside much-needed funding, we must make the regulatory landscape much easier, and across Government we are having a review of regulation to ensure that we can move faster to build things in this country. Nowhere is that more important than in communities that have come together to deliver a project. That is good for us as a country, good for social and economic growth and good for local communities, and we need to make it easier. I am happy to discuss the issue further with the hon. Lady, because these are the kinds of projects that we want across the country.
Charlie Dewhirst (Bridlington and The Wolds) (Con)
The Minister for Energy (Michael Shanks)
Ministers in my Department have regular discussions with Cabinet colleagues on a range of matters, including solar policy, but the large-scale solar projects that are given to the Secretary of State to make quasi-judicial planning decisions on are not part of such conversations. Solar power remains a hugely important part of our energy mix. It is the cheapest and fastest to deploy, and will be a key part of how we meet our mission for clean power by 2030.
Charlie Dewhirst
Given that the Department for Environment, Food and Rural Affairs has yet to publish its land use framework or its 25-year farming road map, would it be prudent for the Government to pause all major solar farm applications until such time as they have a joined-up strategy for energy production on agricultural land?
Michael Shanks
There were 14 years when the Conservative party could have had a land use framework or a centralised strategic spatial energy plan, but it did not. We are now doing those things, and there will be an alignment between the strategic plan for energy and the work that DEFRA is doing on a land use framework. On solar, even the most ambitious plans for the roll-out of ground-mounted solar would use only 0.4% of UK land by 2030. These projects are important for the hon. Gentleman’s constituents and for people across the country if we are to bring down bills as quickly as possible, and of course they go through a rigorous planning process.
Alistair Strathern (Hitchin) (Lab)
Solar energy is an important part of securing clean, cheaper energy for our country, but one way to reduce its pressure on land use is to ensure that we are making better use of rooftops. It is fantastic that after my campaigning, we are going to be much tougher in requiring new homes to come with solar panels, but all too often car parks and commercial properties are still not making full use of the technology. How can we do far more to make use of those rooftops too, in order to generate the clean, cheap power that we all need?
Michael Shanks
My hon. Friend is absolutely right. There is a broad consensus across the House that if we can put solar on rooftops, that space can be utilised to generate clean power. We are ambitious and excited about the opportunity to put solar panels on as many rooftops as possible. We consulted recently on whether car parks should have solar panels on them. We are looking through the responses to that consultation and will say more in due course, but wherever possible, if we can generate clean, cheap power by utilising rooftops for solar, we want to do it.
Greg Smith (Mid Buckinghamshire) (Con)
I agree with the Minister that rooftops are the place to put solar. Indeed, as my right hon. Friend the Member for East Surrey (Claire Coutinho) made clear when she was Secretary of State for Energy Security and Net Zero, agricultural land should be protected from ground-mounted solar installations. The campaign group Stop Oversized Solar has found that operational sites and solar facilities in the planning pipeline alone are set to replace an area of farmland bigger than Merseyside, and that overall up to 5% of UK cropland is at risk from solar, so why do the Government persist with their claim that land take will be 1%? When Labour said that food security is national security, did the energy team not get the memo?
Michael Shanks
I always welcome consensus in the House, so I am delighted to hear that there is still consensus on rooftop solar. The Conservatives have moved away from so many of their previous positions and I was not sure if this was going to be another, although I wonder why that rooftop solar was not built over the past 14 years. But we will leave that to one side.
On the hon. Gentleman’s question about land use, we have been clear that ground-mounted solar will play an important part as the energy cannot all be generated from rooftop solar, but we want to ensure that communities are part of the decision making. The planning process is hugely important in that, but we also recognise that some communities have felt that there has not been a joined-up strategic approach. That is why we are publishing the strategic spatial energy plan, alongside the land use framework. Even in our most ambitious scenarios, 0.4% of land will be taken up with solar.
Susan Murray (Mid Dunbartonshire) (LD)
The Minister for Energy (Michael Shanks)
Great British Energy and Great British Energy Nuclear will invest over £8.3 billion this Parliament in home-grown clean power. We will keep backing renewables through contracts for difference, which secured record amounts of solar and the world’s largest floating offshore wind farm last year. Allocation round 7 will build on this success, for which we have already announced a budget of over £1 billion across offshore wind. The results will be announced in due course.
Susan Murray
Across Scotland and the UK, towns that once powered our economy have been left behind, as coalmines, steelworks, dockyards and, as we are now hearing, refineries and chemical plants are closing down, taking generations of skilled workers with them. We now have a chance to revive those communities by rebuilding British manufacturing to supply the components for our green transition, as well as for the wider net zero economy. As the Government prepare to conclude their consultation on the future of the North sea, do the Government plan to invest in the factories of Britain and in upskilling our workforce to be the innovative and sustainable local supply chain that the North sea and our net zero economy need?
Michael Shanks
Yes. The hon. Lady touches on a number of points. The transition means building on the industrial strategy that we outlined as a Government, because are not agnostic about industrial policy—we care that things are built in this country again. That is why there is a £1 billion supply chain fund to ensure that we get the economic advantage of the clean power transition, as well as energy security. There is a broader question around building up the skills to ensure that there is a future workforce that can take advantage of that. She and I both know that that sits with the Scottish Government, who are woefully underfunding further education—a route that so many young Scots might take to create the opportunity to embark on a career in the energy sector—so I hope there will be a change of Government in Scotland soon.
Tom Hayes (Bournemouth East) (Lab)
I am thrilled that University Hospitals Dorset NHS foundation trust, one of the region’s biggest emitters, has secured two grants totalling £3 million from Great British Energy for solar investment, but its ambition goes further. The trust wants to develop a geothermal solution that pulls energy from the geology under the Royal Bournemouth hospital. Will the Minister meet me and representatives from the trust so that we can explore this potential decarbonisation project together?
Michael Shanks
It sounds like a great idea. I am very happy to meet my hon. Friend and representatives from the trust to discuss that.
Dr Al Pinkerton (Surrey Heath) (LD)
Rachel Taylor (North Warwickshire and Bedworth) (Lab)
The Minister for Energy (Michael Shanks)
My right hon. Friend the Secretary of State and the Minister for Climate are in Brazil at the conference of the parties, fighting for Britain’s interests in the global transition and playing our part in securing leadership on the climate crisis. Since our last oral questions session, we have announced that 250 schools will benefit from Great British Energy’s solar roll-out; SSE has announced £33 billion of private investment in the energy system; we have set out our clean energy jobs plan to create 400,000 new clean energy jobs; and letters have started to arrive for the 6 million families who will receive £150 off their bills this winter. That is the difference this Government are making in order to deliver energy security, climate leadership and good jobs, and to protect households and businesses.
Rachel Taylor
Last year, over 1,000 former mineworkers in North Warwickshire and Bedworth benefited from this Government’s historic decision to release the surplus from the mineworkers’ pension scheme. Now, members of the British Coal staff superannuation scheme, such as my constituents Ray Sweet, Don Jennings and Andy Callow, are seeking that same justice. I held an event with the BCSSS members in my constituency, at which I heard from a woman who joined the National Coal Board at 16 and went to the mines at 5.30 in the morning to ensure night shift miners got their pay packets. Could the Minister reassure—
Mr Speaker
Order. Sorry, but one of us is going to have to sit down. Please—topical questions are meant to be short and punchy. You cannot do a full statement. I think you ought to try to catch my eye for an Adjournment debate, because this is a very important subject. Minister, I think you have got the principle of the question.
Michael Shanks
I pay tribute to all those who toiled in our coalmines for a very long time—we owe them a great debt. As the Prime Minister said in the House on 12 November, the Government remain committed to agreeing a way forward with the trustees that will benefit scheme members. We will make an announcement on this issue in due course.
Claire Coutinho (East Surrey) (Con)
At this COP, acres of the Amazon were chopped down so that the Secretary of State can lecture us about saving the planet. Can the Minister justify why his Government did not even put a single penny into the forest fund, which could have at least repaired some of the damage?
Michael Shanks
I think the shadow Secretary of State has a bit of a cheek talking about anyone’s action on the climate crisis when she has completely reversed her own position on it. The UK’s climate leadership is an incredibly important contribution to the world’s action on the climate crisis. That crisis is not a future threat, but a very present reality. The UK has been a part of the forest initiative; we have supported Brazil and others to make that happen. Of course, coming up to a Budget and with tight fiscal considerations, we want to make sure that every pound of British taxpayers’ money is spent. We have not ruled out any future support for such schemes. Britain’s leadership at COP and at other international forums is important for our own economic interests, but also for tackling the global climate crisis.
Mr Richard Quigley (Isle of Wight West) (Lab)
Michael Shanks
This is partly why the upgrade of our grid is so important. My hon. Friend references the particular example of the Isle of Wight, but right across the country we need to build much more transmission infrastructure so that we can get power to communities and businesses that need it most and bring down bills by getting clean power to people. I am happy to speak to him further about the specific case, and I know he is already engaging with the distribution network operator responsible for this case to make things happen.
Mr Lee Dillon (Newbury) (LD)
Mr Speaker
May I also suggest that this is such a big issue, but nobody put in for an urgent question? I really do think it is important.
Michael Shanks
First, I am sure the whole House would echo my hon. Friend’s comments about her constituents in Monmouthshire. Our thanks go to the emergency services, who have done an incredibly diligent job in difficult circumstances. She is right that it is yet another example of where the climate crisis is not some theoretical future threat, but a present reality. We have to tackle the climate crisis as quickly as possible. That is why this Government are doing everything we can to get off of fossil fuels, while also investing in flood defences across the country.
Robbie Moore (Keighley and Ilkley) (Con)
Chris Vince (Harlow) (Lab/Co-op)
Michael Shanks
I congratulate the school in my hon. Friend’s constituency. It will start to receive money off its bills immediately, which of course can then be reinvested into delivering exactly what we want schools to be delivering: better teaching facilities and resources for schoolchildren. When I visited a school that had GBE solar panels on its roof, I learned that the children had had a number of lessons on clean energy; they had learned about how sustainability was improving their school and about the wider impacts on the planet. That is an important curriculum benefit.
Sarah Dyke (Glastonbury and Somerton) (LD)
Bob Blackman (Harrow East) (Con)
Michael Shanks
That is exactly why we are embarking on upgrading the national transmission system and investing in that. I would gently say that the hon. Member’s party seems to be opposing most of that action at the moment, but it is critical not just for future power sources, but to ensure that we can get power to demand centres where we know there are economic growth opportunities. It is hugely important, and that is why we are driving it forward.
Mr Jonathan Brash (Hartlepool) (Lab)
Hartlepool has one of the largest clean energy economies in the north of England with thousands of local jobs—jobs that Reform would destroy. At the same time, we have one of the largest nuclear industries. We have signed the biggest deal in our history—jobs that the Greens would destroy. Does the Minister agree that when it comes to energy policy, we’ve got clowns to the left of us and jokers to the right?
Linsey Farnsworth (Amber Valley) (Lab)
Reform-led Derbyshire county council has recently abolished its climate change committee and scrapped its aim to tackle the causes and impact of climate change. Will the Minister outline the steps that his Department is taking to ensure that local authorities continue to address climate change effectively and meet national targets?
Michael Shanks
That sounds like just another example of the chaos that Reform-led councils across the country are inflicting on communities. The truth is that we had just a few moments ago an example of why local councils thinking about the impact of climate change is so important, and we now have Reform councils dismissing the very action that would protect communities from devastating floods and other impacts of climate change. It is important that we stay the course, recognise that the climate crisis is important and do everything possible to protect communities.
Sir Edward Leigh (Gainsborough) (Con)
Earlier, the Minister said that only 0.4% of land is being taken by solar, but he knows that in the Gainsborough constituency the number is far higher, because I went to see him—he was most gracious and reasonable. He will know that 14,000 acres around Gainsborough will be taken from some prime agricultural land. Just to be reasonable, will he have a look at this again and try to take all these solar applications together?
Michael Shanks
Let me say that the Father of the House was also very reasonable in the meeting that we had; I am glad that we had that opportunity. If we hit the absolute ambition of the solar roll-out, we will have 0.4% of land, but as I said to him, I recognise that a number of projects in particular areas have not been strategically planned for a long time. That is why we are bringing forward the strategic spatial energy plan, so that we plan the system across the whole of Great Britain and so that communities feel that things are being done not to them, but with them.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
Today’s news that ExxonMobil is to close the Fife ethylene plant in Mossmoran is a devastating blow to many of my constituents. I am furious that contract workers appear to have been locked out of the site this morning. News reaching me suggests that ExxonMobil staff, many of whom have decades of service, have been told that they will lose their jobs but have no idea of the redundancy package they will receive. That follows months of attempts to engage with ExxonMobil in good faith, during which it was not forthcoming about its intentions or about what the Government can do to save the plant and the jobs. ExxonMobil continues to ignore my requests for clarity. Will the Government do all that they can to support a future for the plant and its workers? Will the Minister join me in calling on ExxonMobil to share vital information at this incredibly—
Mr Speaker
Order. [Interruption.] I am speaking to the hon. Lady. This is a very important subject, and I really do think it matters—she is absolutely right. I think such issues should be heard and discussed in the Chamber. It might be worth thinking about putting in for an urgent question, because this issue is so serious.
Michael Shanks
Thank you, Mr Speaker.
This is obviously a hugely concerning time for the workers in Mossmoran, their families and the wider community. The Government have been in regular contact with the company. I know that my hon. Friend the Member for Cowdenbeath and Kirkcaldy (Melanie Ward) met with the Business Secretary recently and has been trying to engage with the company as much as she possibly can. The company has faced significant global challenges, including closing a chemical plant in France. We stand ready to provide whatever support we can, but the issues she has raised are obviously deeply concerning. I know that the Business Secretary will look to speak to her and others to ensure that we have as robust a response as possible and that we support the workforce at what is obviously an extremely difficult time.
Dr Ellie Chowns (North Herefordshire) (Green)
With just a few days of COP30 left, it is incredibly disappointing that UK climate leadership is at risk because of the Government’s decision not to contribute to the tropical forest forever facility to end forest destruction. Can the Minister please confirm whether reports that that decision is under review are accurate? Can he assure the House that the UK will play its part in contributing directly to taking its fair share of ending forest destruction?
Michael Shanks
We are taking a leading role at COP and at home by driving forward the clean power mission, which requires the infrastructure that the Green party regularly opposes—the party talks on this issue, but it does not actually deliver it. We are at COP fighting for Britain’s interests and playing our part in leading the world and ensuring that collectively we can collaborate to tackle the most existential crisis the planet faces, and we will continue to make that a key priority of this Government.
Liz Twist (Blaydon and Consett) (Lab)
Polling by National Energy Action has shown that four in 10 adults with prepayment meters have found themselves without credit and unable to access heating or power in the past 12 months. Families often face immense distress as standing charges continue to accrue as a debt that must be cleared before energy can be accessed again. Does the Minister agree that Ofgem must explore practical reforms to ensure that households are not penalised for maintaining access to energy?
Alicia Kearns (Rutland and Stamford) (Con)
Last year, 2,000 acres of farmland in my constituency were approved for solar by the Government, and now a further 2,000 are being eyed up immediately next door. Together, those plants will build the first UK solar city, bigger than the Vatican and Monaco put together. When will the Government bring forth the land use strategy, and when will they impose minimum compensation for those who are currently losing their countryside and their communities?
Michael Shanks
I have always appreciated my engagement with the hon. Lady on these questions. The cumulative impact of applications is covered by the planning system, which considers all those impacts, but the hon. Lady is right to suggest that the land use framework and the strategic spatial energy plan are about taking a more strategic approach to the way in which we look at where such projects are sited. As for the question of community benefits, we have consulted on that and will say more shortly, but our general view as a Government is that communities should benefit from hosting infrastructure, particularly solar, which has often not produced the same community benefits as other infrastructure.
Euan Stainbank (Falkirk) (Lab)
Last month the Energy Minister stated that the £200 million investment in Grangemouth from the national wealth fund that was secured by Scottish Labour Members has brought private investment to the table. Does he agree that we need an anchor industry in Grangemouth with a scale and skills profile similar to those of the former oil refinery, and that we also need the Government to take a partial stake and to make an announcement, this side of Christmas, on the direction of Grangemouth’s industrial future?
Michael Shanks
I pay tribute to my hon. Friend, who has worked extremely hard with the Government and with the national wealth fund to ensure that we are bringing projects forward. More than 100 projects came forward for that £200 million investment by this Labour Government through the wealth fund; we are considering all of them, and hope to make announcements soon. However, as my hon. Friend will understand, given the substantial amounts of public money involved, we must ensure that due diligence in respect of all those businesses and projects is complete before we can make any announcements.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
In the light of the deeply damaging situation at Mossmorran, what is the Minister’s assessment of the potential impact on the Acorn carbon capture, utilisation and storage project?
Michael Shanks
We are obviously still processing that news this morning, but I can say that I have had a number of conversations to ensure that the wider energy infrastructure as it relates to Mossmorran and to Grangemouth itself, and the pipelines that connect them, will not pose any risk to our energy system. As for the wider question of Acorn, I have taken that forward recently, having gained the carbon capture part of the brief, and I meet the company regularly. We have put money into that project because we want to see it succeed.
Lillian Jones (Kilmarnock and Loudoun) (Lab)
XLCC’s project to build the UK’s first high-voltage direct current subsea cable manufacturing factory at Hunterston, with its headquarters in my constituency, represents a major opportunity for Ayrshire. It is exactly the kind of investment in renewable energy that we need to drive growth, create jobs and strengthen our energy security. What steps is the Minister taking to support firms such as XLCC to delivery these projects?
Michael Shanks
One reason why we are so keen for the supply chain for the upgrade of our grid to be in the UK is our wish to ensure that there are opportunities for factories in constituencies such as my hon. Friend’s, and I recently met her, along with my right hon. Friend the Secretary of State for Scotland and XLCC, to discuss those opportunities. XLCC is currently changing its business model but remains committed to being part of the supply chain for cables in the future, and we will continue to do everything we can to support it.
Bradley Thomas (Bromsgrove) (Con)
The oil refining industry employs tens of thousands of people and is crucial to our energy security. It is also a key part of the ministerial brief. The sector is under immense pressure, so can the Minister tell the House when he will meet industry representatives directly?
Michael Shanks
I have met industry representatives, and when I did so they told me that it was the first time they had met anyone from the Government in 13 years. Many of the issues that are now emerging have been long in the making because of the last Government’s failure to recognise their importance. However, the hon. Gentleman is right to say that refineries are an important part of our energy mix and our economy. We will do all that we can to support them, and I continue to meet their representatives and those of Fuels Industry UK regularly.
Jim Shannon (Strangford) (DUP)
Here is a pithy question, which I hope will be important for us in Northern Ireland. Will Northern Ireland receive a dedicated share of UK-wide peatland funding schemes such as those covered by the Nature for Climate Fund?
North Hyde Substation Outage Review: Government Response
Michael Shanks Excerpts(1 month, 3 weeks ago)
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The Minister for Energy (Michael Shanks)
In March 2025 the Secretary of State for Energy Security and Net Zero commissioned the National Energy System Operator to undertake a comprehensive review of the incident at North Hyde electricity substation. The review was to identify lessons and recommendations for the prevention, and management of future power disruption events, and lessons for Great Britain’s energy resilience more broadly. NESO published its review report on 2 July 2025.
The Government response to NESO’s report sets a clear implementation plan to make progress against NESO’s recommendations. We will build on this implementation plan through our commitment today to publish an energy resilience strategy in 2026. The strategy will set out the Department’s strategic priorities to ensure a secure and resilient energy system, now and in the future.
Energy resilience strategy:
On top of taking immediate action to address learnings from the North Hyde incident, it is critical that we also consider how the risk landscape is evolving rapidly and growing more complex. The Government’s clean energy superpower mission will drive a sector-wide transformation, offering a critical opportunity to further embed security and resilience into system design, strengthening energy reliability.
The energy resilience strategy will address sector-specific challenges across the entire energy system, like those identified following the North Hyde incident. It will set out this Government’s ambition to build power sector resilience across society, including the critical sectors that rely on energy to deliver our critical services, and it will create a framework to embed resilience across the energy system now and in the future.
North Hyde implementation plan:
The North Hyde implementation plan has been developed in collaboration with the energy resilience group—a partnership between Government, the regulator and industry. This ensures a joined-up approach to energy resilience, emergency response and recovery—will set out specific actions to enhance resilience across the three pillars of NESO’s review:
Resilience of energy infrastructure;
Response and restoration of energy infrastructure; and
Enhancing the resilience of critical infrastructure to energy disruption
The majority of actions will be delivered by the end of 2026 and will bolster the energy industry’s prevention and preparedness for exceptional events, reducing the likelihood and impact of energy disruption. While improvements will be made, no energy system can be totally immune from disruption, which is why, in tandem, these actions will support other critical national infrastructure sectors—just as transport—in enhancing their own resilience to such events, as far as is reasonably practicable.
The newly established energy security and resilience taskforce, chaired by the Minister of State at the Department for Energy Security and Net Zero and comprising senior energy sector representatives, will oversee and assure the implementation of these actions.
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Hydro Benefit Replacement Scheme
Michael Shanks Excerpts(1 month, 3 weeks ago)
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The Minister for Energy (Michael Shanks)
I am tabling this statement to inform Members of the outcome of the statutory review of the hydro benefit replacement scheme and the common tariff obligation, which help protect consumers in the north of Scotland from inherently high costs of electricity distribution in this region.
Electricity network charges are paid primarily by suppliers and then passed on to consumers. These charges are split into those for the high voltage transmission network, and the low voltage distribution network. It costs significantly more to operate and maintain the electricity distribution network in the north of Scotland than elsewhere, due to its large and sparsely populated terrain. Under the principle of cost reflectivity, this means consumers in this area face higher distribution network charges.
The hydro benefit replacement scheme was established under the Energy Act 2004 and provides an annual cross-subsidy—£112 million in 2024-25—which will reduce electricity distribution charges for consumers in the region by around £70 per household in 2025-26. It is funded by electricity suppliers across Great Britain, and hence ultimately by consumers, at an annual average cost of between £1 and £1.50 per household.
The common tariff obligation places a requirement on suppliers’ charging arrangements in the north of Scotland to ensure domestic consumers are not charged different prices based on their location within the region. There is no direct monetary amount attached to the common tariff obligation.
There is a statutory requirement to review the hydro benefit replacement scheme every three years. There has been a long-standing ministerial commitment to review the common tariff obligation alongside the hydro benefit replacement scheme.
The Government have reviewed these schemes through engagement with our delivery partners in Scottish and Southern Electricity Networks and Ofgem, combined with analysis of distribution charges and the assistance amount. The north of Scotland continues to have significantly higher charges compared to the rest of GB and therefore it remains appropriate for assistance to be targeted. The review concluded that the current design continues to strike the right balance between protecting consumers in the north of Scotland and maintaining the benefits of cost-reflective charging, which promotes efficient use of the network and minimises overall system costs. As such, the schemes will be retained in their current form.
The Government’s recent decision on reformed national pricing has no impact on the outcome of this review.
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