Draft Contracts for Difference (Miscellaneous Amendments) (No. 2) Regulations 2025

Michael Shanks Excerpts

Monday 2nd June 2025 General Committees

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

I beg to move,

That the Committee has considered the draft Contracts for Difference (Miscellaneous Amendments (No. 2) Regulations 2025.

It is a pleasure once again to serve under your chairmanship, Mrs Hobhouse. The draft regulations were initially laid before the House on 11 March, but they were re-laid on 2 April to correct very minor drafting errors.

On 10 February, I made a statement to the House confirming that, following a public consultation, the Government intend to introduce short-term support for large-scale biomass generators to ensure the UK’s continued security of supply. As set out in our response to that consultation, legislative changes are needed to enable the Government to provide support to existing biomass generators through a new low-carbon dispatchable contract for difference. I stress that, while the draft regulations will allow for new support to be provided, the final decision will be taken following the conclusion of internal assessments and commercial negotiations, which are ongoing.

Before I cover the provisions of the draft regulations in more detail, I will briefly set out the Government’s position on large-scale biomass generation, which provides around 5% of the UK’s annual electricity generation. Current support for these generators under CfDs and the renewables obligation ends in 2027. It is critical to the Government that we maintain security of supply, even if that means making hard decisions.

I will briefly set out the range of factors that we considered before deciding whether to provide further support for these generators. First, we took analysis from the National Energy System Operator and concluded that, without further support for large-scale biomass, the country could face security of supply risks between 2027 and 2031. Relying on alternative options, such as newly built gas plants, to come online in that timeframe would carry significant risks. The Government will not take chances on our energy security. Secondly, we undertook comprehensive analysis of the costs of biomass against the alternatives. Our central projections show that, on the right terms and if playing a much more limited role in the system than today, biomass generation can be the lowest-cost option for bill payers during that period. Lastly, we will introduce strengthened sustainability requirements from the outset of any new agreement. Importantly, the draft regulations will also allow the sustainability measures to be enhanced throughout the duration of the contract, in line with the latest scientific evidence or global best practice.

Those factors represent a substantial shift from past arrangements on sustainability and value for money. However, we recognise the strength of concerns about the use of unabated biomass. It is not a long-term solution. We are determined that, the next time these decisions are made, the Government will not be left in the circumstances that we were this time. We will therefore do the work that was not done by the previous Government to build strong and credible low-carbon alternatives, so that we have proper options in four years’ time.

During my oral statement earlier this year, I also confirmed that the Government had agreed heads of terms for a new CfD with Drax. The draft regulations will enable that CfD, if a final decision is taken to provide it, but they will also enable similar agreements with any other biomass generators. I remind the Committee that the draft regulations are about ensuring only that we have the option available to respond to security of supply needs and to deliver low-carbon electricity to the grid at the lowest cost to the consumer.

I know, however, that many Committee members are interested in the details of a potential agreement with Drax, the largest biomass generator in the UK. The proposed agreement with Drax would limit generation to times when the system and, in turn, consumers most require it. When renewable power is abundant, Drax will not generate, and consumers will benefit from cheaper wind and solar instead. That means that Drax will only be supported to operate less than half as often as it currently does.

As a result, the deal would halve the amount paid in subsidies, compared with existing arrangements—that is equivalent to a saving of nearly £6 per household in annual bills—and, when compared with the alternative of procuring gas in the capacity market, it would save consumers £170 million in subsidies each year. The agreement also introduces tough new measures on sustainability, and we will appoint an independent adviser to support the development of policy and practice in biomass sustainability and ensure that they keep pace with the emerging science and international landscape.

The draft regulations will amend the Contracts for Difference (Definition of Eligible Generator) Regulations 2014 such that a person is eligible for a CfD in respect of a “biomass station” where it is intended that the existing biomass station will continue to provide electricity. Simply put, this will enable a new low-carbon dispatchable CfD to be signed with existing biomass generators, which is not currently possible. As is the case today, the Low Carbon Contracts Company will be the counterparty to any new CfD.

The second part of the draft regulations relates to sustainability. The Government support the use only of sustainable biomass, and we continue to review sustainability requirements so that we can remain aligned with the latest evidence. The draft regulations will amend the Electricity Market Reform (General) Regulations 2014 to allow the Secretary of State to direct the LCCC to implement amendments relating to sustainability obligations within the new CfD. That will mean that the Government can make changes to sustainability requirements within the new contract, to ensure that they keep pace with the latest evidence.

Before I conclude, I want to thank the Public Accounts Committee for its review and report on wider biomass policy. My Department is carefully considering the contents of that report and will respond in due course.

The Government will do whatever it takes to deliver energy security and to protect bill payers now and into the future. The draft regulations support that commitment. They make the necessary amendments to enable support to be provided to biomass generators when existing schemes end in 2027. That will enable us to maintain the UK’s security of supply, deliver value for money for consumers and enhance sustainability requirements. I commend the regulations to the Committee.

--- Later in debate ---

[Michael Shanks]

We are somewhat through the looking glass with the response from the shadow Minister, the hon. Member for West Suffolk, who seemed to forget in his long list of things that were wrong with the contracts previously that it was his Government that agreed them. This Government have sought to improve every single aspect of the contract: halving the subsidy, improving sustainability, only running on the system when it is required, and delivering security of supply. He talks about being reckless and irresponsible. What would have been reckless and irresponsible is to come here and say that we do not care about the security of supply and the importance of finding the dispatchable power that we need. That is the decision that we are here to allow the Government to take forward—

[Nick Timothy]

If the Minister is interested in the security of supply, why will the Government not allow new licences for oil and gas in the North sea?

[Michael Shanks]

We are considerably off the topic of the draft regulations, but since the shadow Minister makes the point, I will answer the question. We have not said that there will be no new oil and gas. We have said that there will be no new licences to explore new fields, taking into account all the available evidence, which is that the North sea is a declining basin. If we manage it properly, we can have a future energy process in the North sea that delivers on carbon capture, hydrogen, offshore wind and oil and gas for many years to come. There is much more on our oil and gas policy that we can discuss, perhaps in a different debate.

On these particular draft regulations, the shadow Minister asked a number of questions, which I am happy to follow up on. On the KPMG reports, perhaps he did not see, but I wrote on 25 February—as soon as I could following my statement in the House, because I take these things very seriously—and the chief executive of Ofgem responded on 12 March. Both letters are in the Library and the shadow Minister can read them. The KPMG reports do not belong to the Government or to Ofgem; they belong to Drax, and it is for Drax to decide whether to release legally privileged documents.

Clearly, analysis that NESO provides to the Government is sensitive, for very good reasons—a considerable amount of what NESO does in running the energy system must be kept secret, for commercial reasons and so that the Government and NESO can freely exchange information—but it published a summary of its advice on its website, which, again, the shadow Minister can look up.

On the points made by the hon. Member for Thornbury and Yate, first of all, we are back from recess, which means we are back to work. The Government do not have time to waste, hence, I am afraid, we scheduled consideration of the draft regulations for the first day back; we have things to get through. She made the point that there are alternatives to biomass. A number of others have made that point, too, but they have yet to name the alternatives and what can be built within two years to provide the necessary supply.

We do not think that there is a long-term future for unabated biomass—we agree on that—but the crucial point is that we have a short-term security of supply issue that we have to resolve. We need dispatchable power when we need it, and the alternatives—gas, as the shadow Minister says—are considerably more expensive. The Conservative party might want to consign us to much more of the fossil-fuel casino and higher bills for all our constituents. This is a short-term decision for us to move away from that.

We have significantly increased the sustainability requirements and we will appoint an independent sustainability adviser to provide expert advice and challenge to both Government and providers on sustainability policy and delivery. We want to take sustainability much more seriously than the previous Government did, but this is an essential short-term measure to ensure the security of supply across the country. The draft regulations—copies are available in the room if Members have not had a chance to read them—will enable the Government to continue to deliver security of supply at the lowest possible cost for consumers while protecting and enhancing vital sustainability measures, and I commend them to the Committee.

Question put.

Capacity Market: Consumer-led Flexibility

Michael Shanks Excerpts

Monday 2nd June 2025 Written Statements

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

I am tabling this statement to inform Members of a publication relating to the capacity market. The publication provides a response to the Government’s recent consultation on improvements to capacity market rules and treatment of consumer-led flexibility. It sets out the Government’s intention to proceed with all of the changes proposed in the consultation, after all received majority support from respondents.

This Government have committed to delivering clean power by 2030 and accelerating progress towards net zero, while ensuring continued security of supply. The capacity market is Great Britian’s main mechanism for ensuring security of electricity supply by procuring additional capacity needed to meet peak demand ahead of time.

The funding provided through the capacity market incentivises investment in new and existing capacity, as well as interconnectors, batteries, and consumer-led flexibility. This capacity is acquired through annual auctions held at intervals four years ahead and one year ahead of their respective delivery years. The Government regularly amend the capacity market prior to auction cycles to ensure it remains fit for purpose, is cost-effective, and supports broader strategic objectives.

This Government response sets out our intention to proceed with policies to streamline how consumer-led flexibility, delivered by demand-side response mechanisms, participates in the capacity market. As participation in the capacity market from demand-side response portfolios increases, it is important that capacity market rules are updated to better incorporate and enable access from technologies that can respond flexibly to periods of high energy demand. In addition, the Government are also introducing a termination fee for demand-side response capacity market units that fail to demonstrate agreed capacity, improving delivery assurance to enable the capacity market to fulfil its central principle of ensuring security of supply.

The response also outlines our intention to move forward with changes to the capacity market rules to improve accessibility and provide policy intent clarifications. The changes confirmed in the Government response will enable capacity market units to change their opt-out status following a change in their operational circumstances and will remove rules on transitional and coronavirus arrangements which are no longer required. The proposed changes also extend a policy to allow existing generators to use data older than 24 months to prequalify for auctions held in 2026 and clarify the role of the scheme’s delivery body. These changes should increase participation in future Capacity Market auction and therefore increase competitiveness and value for money for consumers.

The Government intend to introduce these changes prior to the 2025 prequalification period for the next capacity market auctions. This will give participants clarity and certainty ahead of their entrance into the auctions and allow them to adapt to the changes we have made.

[HCWS671]

Energy National Policy Statements

Michael Shanks Excerpts

Thursday 22nd May 2025 Written Statements

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

Today, I am laying before Parliament the draft revised energy national policy statements.

The energy national policy statements were first designated in 2011. They set out the Government’s policy for the delivery of energy infrastructure and provide the legal framework for planning decisions in key energy policy areas: fossil fuels (EN-2); renewables (EN-3); gas supply and gas and oil pipelines (EN-4); electricity networks (EN-5); and nuclear (EN-6). They each sit below an overarching energy national policy statement (EN-1), which sets out the need for new energy infrastructure.

The Chancellor announced a review of the current suite of NPSs in July 2024 to provide clarity for industry and stakeholders on the Government’s clean energy superpower mission.

We have reviewed all the NPSs and determined that the existing EN-1, EN-3 and EN-5 documents should be amended to reflect the policies set out in the clean power 2030 action plan and support the investment required to build the infrastructure needed for to achieve clean power by 2030 and accelerate to net zero.

A new nuclear national policy statement (EN-7) is in development, with anticipated designation in 2025. Once EN-7 is designated, EN-6 will be reviewed separately. It therefore falls outside of the review of the current suite of NPSs.

On 24 April 2025, I launched a public consultation on the draft revised NPSs, supporting habitats, sustainability reports and associated appendices. These are subject to a five-week public consultation and are all available on gov.uk. The public consultation will close on 29 May 2025.

The relevant period for parliamentary scrutiny will be from 22 May to 22 July 2025. After the relevant period has elapsed, the NPSs will be laid in Parliament in their final form for approval by resolution by the House of Commons, or by deemed consent by the House of Commons following a 21 sitting-day “consideration period”.

[HCWS654]

Community Benefits and Shared Ownership for Low-carbon Infrastructure

Michael Shanks Excerpts

Wednesday 21st May 2025 Written Statements

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

Today my Department is publishing a working paper on community benefits and shared ownership of clean energy infrastructure.

Britain is moving at speed to build the clean home-grown energy we need to deliver energy security, lower bills, good jobs and growth, and to protect future generations. Every wind turbine, solar panel and piece of grid infrastructure we construct helps protect families, businesses and the public finances from future fossil fuel shocks.

The Government are clear that communities are providing a vital service to the country when they host this infrastructure in the national interest. That is why our manifesto committed to ensure that communities directly benefit from infrastructure projects they host. The working paper is the first step to exploring how we may bring about these changes.

We are seeking views on the proposed introduction of a mandatory community benefit scheme for low carbon energy infrastructure in Great Britain, which would require developers to contribute a set amount to a community fund. This fund could be spent on local projects, such as school clubs, biodiversity projects, local insulation improvements, community sports and transport, and other initiatives—with the process led by communities, who would work with developers to tailor spending to local priorities.

Community benefits are already delivered on a voluntary basis across Great Britain, including in the solar, offshore and onshore wind industries. However, this is not consistent across sectors or locations, which is why the Government are considering mandating the provision of community benefit funds. This would create a level playing field across all developers and communities, ensuring consistency and fairness in application, while facilitating greater community engagement.

In addition, we are seeking views on how the Government can support the expansion of shared ownership of renewables. This offers communities the opportunity to invest in renewables projects, such as onshore wind or solar farms, and share in any profits. Shared ownership agreements will enable some communities to reinvest profits back into local initiatives, such as fuel poverty support and energy efficiency schemes, while increasing community acceptance of new infrastructure. The Government also recognise the importance of majority-owned community energy projects, and that is why the Great British Energy community fund will provide financial support to community energy groups to help prepare local energy projects this financial year.

The paper seeks evidence to further our understanding of current shared ownership practices in Great Britain and whether a voluntary approach to shared ownership is sufficient.

The working paper will be open for responses for an eight-week period. We look forward to hearing from communities, industry and others as we take the next steps in our mission to make Britain a clean energy superpower.

[HCWS650]

Solar Farms

Michael Shanks Excerpts

Thursday 15th May 2025 Commons Chamber

[Sir Edward Leigh]

I will make some progress and give way in a moment—I must be fair to other people.

There are solar schemes totalling 13,000 acres within a 6-mile radius of the small town of Gainsborough. Madam Deputy Speaker, can I please use a visual aid here? This map shows loads of solar farms—[Laughter.] I think I got away with it!

The Secretary of State approves these projects immediately; they go through his desk within a week. The cumulative effect of these solar installations is colossal in one small area, with numerous sites having been proposed and accepted in Lincolnshire. I want to say something to the Minister. Can he concentrate on what I am saying for a moment, because this is terribly important?

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

I am listening.

[Sir Edward Leigh]

We are not arguing against solar farms. All we are begging the Minister to do is take them together. We cannot have all these separate public inquiries. We have to look at the 13,000 acres all over Gainsborough. Is that not a fair point? Otherwise, it is totally unfair on one particular area. That is the only point we are making.

This is all done on a cheat—a so-called nationally significant infrastructure project, which was a device brought in by Tony Blair for nuclear power stations and that sort of installation. The Government are bypassing local democracy. That is what is so unfair, and it is why people feel disenfranchised in certain parts of England. I agree that if the Government distributed solar farms fairly all over the country, as the hon. and learned Member for Folkestone and Hythe said, there would be no argument, but the fact is that they are concentrating them so much in one small area of England. That is the argument.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

I begin by congratulating the hon. Member for Sleaford and North Hykeham (Dr Johnson) on securing a debate on this important issue. It is the first day in a while that Westminster has not been basking in sunlight, although I did note—contrary to some contributions made by Conservative Members—that solar is currently generating 30% of this country’s electricity, more than any other technology. Solar plays a critical role in our energy mix. The hon. Lady asked whether I would meet her to discuss proposals in her constituency; of course, I am very happy to meet her to discuss these issues, as I meet Members across the House.

I welcome all—or perhaps I should say some—of the contributions to today’s debate. When the debate began, I was not expecting the hon. Member for Boston and Skegness (Richard Tice) to endorse the clean power mission so comprehensively, not only endorsing our rooftop solar revolution but leading the way in his own industrial empire. I will include him in the next newsletter on the clean power mission; I am sure he will happily receive it. I know that we are short on time, but I am happy to briefly outline the Government’s position and respond to some of the numerous points that have been made. I also hold the shadow Minister, the hon. Member for Beaconsfield (Joy Morrissey), in high regard, and I will respond to some of her points over the course of my speech.

The clean power mission that this Government have embarked on is not about ideology. It is about delivering energy security, climate leadership, and the only way in which we can move away from volatile fossil fuels setting our constituents’ bills, which is what so many have faced over the past few years. It is the only way to create well-paid industrial jobs and deliver the clean power mission right across the country. My hon. Friend the Member for North Northumberland (David Smith) referenced community benefits and the benefits to individuals of installing solar panels on their own roofs; he is absolutely right about that, and I will return to the issue of rooftops shortly. I welcome my hon. Friend’s contributions, as he is a former pupil at Park Mains, where I used to teach—although for the record, he was not a pupil when I was teaching there.

My hon. Friend also made the point, which I want to reiterate, that this is not a battle between food security and energy security. I will just say one thing, which I am sure Conservative Members will strongly endorse:

“Solar projects and agricultural practice can co-exist. For example, the science of agrivoltaics is developing, in which solar is integrated with arable farming in innovative ways. That is coming on in leaps and bounds.”—[Official Report, 18 April 2024; Vol. 748, c. 184WH-185WH.]

We can achieve food security and energy security together for our United Kingdom.

[Ben Obese-Jecty (Huntingdon) (Con)]

The Minister and I have had this conversation a number of times. He will be aware that paragraph 2.10.29 of EN-3 states that “best and most versatile” land should not be used for solar farms. He has already informed me that no solar farm in the country uses more than 50% of best and most versatile land; will he commit to a hard limit on how much of that land can be used for a solar project?

[Michael Shanks]

As I think I said the last time we had this exchange, I always welcome the hon. Gentleman’s numerous written parliamentary questions to me—it is a treat to see them every morning, and he does raise important points. I am not going to put a figure on it right now, but we have clearly said that it is important to find the right balance when it comes to best-use agricultural land. I will come back to that issue.

The hon. Gentleman did not let me get to my point. I just spoke about this not being a competition between energy security and food security; those were the words of the shadow Energy Secretary, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), not that many months ago, before the Conservatives went down the hole of denying that the climate crisis is a real thing and that our energy security and food security can co-exist. That was their policy when the hon. Member for Sleaford and North Hykeham last brought this debate to the House, which I think was nine months ago.

[Dr Johnson]

The Minister says that this is not a competition between energy security and farming security. It should not be; the reason it is becoming one is that his Government are allowing our best and most versatile farmland, used for growing crops, to be taken over by solar farms.

[Michael Shanks]

I thank the hon. Lady for her point, but it was not me saying that this is not a competition—it was her own shadow Energy Secretary just a few months ago. I do not accept her point, either; I will come to that very briefly, but in a bit more detail, in a second.

Let us not forget that this is also about tackling the climate crisis. The Conservatives might be willing to ignore that crisis, but the truth is that time and again they forget that climate change will have a devastating impact on agriculture and on land across this country. We have to do something about that, and this is part of it. Solar will be part of our energy security in the future, although it will not make up the entirety of our clean power system.

[George Freeman]

Will the Minister give way?

[Michael Shanks]

I will make a bit of progress, because I am conscious that another debate is to start soon.

Rooftop solar, as many Members have raised, is important. It is not an either/or. We see a real opportunity to put solar on every possible rooftop right across the country. We have announced our ambitions for new homes and for industrial buildings. We recently launched a consultation or a call for evidence on car parks, too. If there is a rooftop that we can put solar panels on, we are keen to do so, but there will also be a role for ground-mounted solar to play.

Finally on this point, the public also support solar. Many Opposition Members have said that they have done their own surveys—where, funnily enough, they get the result they hope to get. In the most recent poll, 88% of people said that they support solar, and that figure has never dipped below 80%. There is a question about balance, as I have said in this House on a number of occasions and will say again. We want to build a clean power system that brings communities with us. That requires a balance of different technologies in different parts of the country, but it is not credible to come here and say, “We support the building of infra- structure, but please do not build it in my constituency.”

[Several hon. Members rose—]

[Michael Shanks]

I will briefly give way to the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont).

[John Lamont]

I am grateful to the Minister, but what is he saying to my constituents who are genuinely terrified by these large-scale wind farms, pylons and solar farms coming to our area of Scotland, which I am sure he knows well? Just as importantly, what does he say to the hon. Members for Rother Valley (Jake Richards) and for South West Norfolk (Terry Jermy), who raised the same concerns as Members on the Opposition Benches?

[Michael Shanks]

First, I say to the hon. Member that I have one of Europe’s largest wind farms on my doorstep, so I know exactly what it is like. I would also say that bringing down bills and delivering energy security matters to his constituents as much as it matters to mine, and a robust planning system is in place. Opposition Members speak as though there is no process for local communities to be consulted, but there absolutely is; they are frequently consulted, and that plays a critical part in the decisions made about these projects.

[George Freeman]

Will the Minister give way?

[Michael Shanks]

I will not, because I am conscious that there is another debate to come.

These questions about the planning system are important. There is a rigorous process in place. We recently raised the threshold for solar projects going into the NSIP regime. I seem to remember a number of Opposition Members opposed that, but the whole purpose was to ensure we do not have the issue that we have at the moment, where a lot of projects are deliberately 49 MW, which is just below the threshold. By changing the threshold, we have more projects going through local, democratic council planning considerations, so those Members should welcome that decision. Those planning decisions also consider biodiversity, the local economy, visual amenity, protected landscapes and many other things, and those considerations also include, as a number of Members said, cumulative impact where more than one project is planned in close proximity.

Members raised many other points that I am afraid I will not have time to come to in this debate, so perhaps we should have another debate on some of them. On land use, the guidance makes it clear that wherever possible, developers should utilise brownfield, industrial, contaminated or previously developed land. Where development on agricultural land is necessary, lower-quality land should be preferred to higher-quality land and so on. On questions of food security, I defer to the president of the National Farmers Union, who says that it is

“important that we’re not sensationalist about the impact on food security”.

I trust his judgment on this question above some others in this place.

I am moving through a number of points as quickly as I can. On land use, a number of Members have asked about how we bring together the land use framework and the strategic spatial energy plan. I had a meeting about that just this week. The Government should have had a serious look at land use in this country many years ago and at how we strategically plan our energy system right across the country. They will come together. We are also looking at regional energy plans that give a more localised view, too. The National Energy System Operator is currently taking that work forward, and that is an important step.

On community involvement, it is important that communities feel like they have a voice in this process. I have frequently said from this Dispatch Box that I do not for a second underestimate the strength of feeling for communities that have any infrastructure built near their houses or villages—whether that is prisons, the electricity system or new housing—but as a country, we cannot simply say that we will not build any new infrastructure because some people might oppose it. If we did that, we would never build anything, we would never deliver economic growth, and we would hold this country back, so I make no apology for saying it is about the balance between how we bring communities with us and how we get on with building in this country again, and that is important.

On the point made by the hon. Member for Sleaford and North Hykeham about glint and glare, the impact on the loop-the-loop was one of my highlights of the debate. As the hon. Member for West Dorset (Edward Morello) said, solar panels are designed to absorb light, not reflect it, and glint and glare is considered in the planning process already, so it is taken into account.

I am conscious of the time, and I apologise to hon. Members who raised serious points that I will not be able to address in this debate. I am happy to follow up in writing on a number of those points.

Solar power is one of the cheapest forms of energy that we have in this country. It is deployable at scale, and can play a critical role in delivering our energy security and in our delivering the climate leadership that we need—to tackle not a future threat, but a present reality that will affect farmers up and down the country if we do not do so. I acknowledge that any infrastructure project has impacts on communities. The planning system does all that it can to mitigate those impacts, but we need to build stuff in this country. Infrastructure has to be built, and our electricity system has to be upgraded. We will build on rooftops, we will build a mix of energy technologies right across the country, and we will take on all innovations that are possible. It is fantastic how quickly we are innovating in this space, but hon. Members cannot simply say, “Let’s not build in my constituency”, because that is not a credible option.

I thank the hon. Member for Sleaford and North Hykeham once again for securing the debate. Although we might not agree on everything, I take her points very seriously. It is important for me to say that I hear the points that she and others have raised, and I am happy to meet her to discuss them further.

[Madam Deputy Speaker (Caroline Nokes)]

Dr Caroline Johnson has one minute to wind up.

Great British Energy Bill

Michael Shanks Excerpts

Consideration of Lords message
Wednesday 14th May 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

I beg to move, That this House agrees with Lords amendment 2B in lieu.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

With this it will be convenient to discuss amendment (a) to Lords amendment 2B.

[Michael Shanks]

I thank all Members of both Houses for their continued scrutiny of this important Bill. In particular, I extend my thanks to my noble Friend the Minister for Energy Security, Lord Hunt of Kings Heath, for his expertise and, dare I say, resilience, which ensured that we reached the resolution that we are here to discuss. Lords amendment 2B was added to the Great British Energy Bill during consideration of Commons amendments, and the Government motion to accept Lords amendment 2B was passed in the other place.

The Great British Energy Bill delivers on our manifesto commitment to establish Great British Energy, which will accelerate clean power deployment, create jobs, boost energy independence and ensure that UK taxpayers, bill payers and communities reap the benefits of clean, secure, home-grown energy. We recognise the breadth of concern across Parliament and from the public on this issue, and particularly on the issue of how Great British Energy will tackle forced labour in its supply chains. Throughout the passage of the Bill, the Government have consistently stated that they wholeheartedly share that concern and agree on the importance of tackling forced labour in supply chains wherever we find it. That is why we tabled Lords amendment 2B, which is the latest move in the Government’s work to tackle the issue of forced labour while we progress towards becoming a global leader in clean energy.

We expect all UK businesses to do everything in their power to remove any instances of forced labour from their supply chains, and Great British Energy will be no different—in fact, we have stated many times that we expect it to be a sector leader on this matter. Lords amendment 2B makes it clear that Great British Energy is committed to adopting measures so that it can take the appropriate steps to act on any evidence of forced labour in its supply chains, as we would expect from any responsible company.

[Sir Edward Leigh (Gainsborough) (Con)]

I am sure we can rely on the Minister to ensure that no solar panels are installed on British farms that are made by the Chinese Government, using slave labour. I am sure that he can assure us on that point.

[Michael Shanks]

I have set that out in this debate in a number of ways. We have absolutely committed that Great British Energy will not invest in any supply chains in which there is any evidence of forced labour, and the measures that we are outlining today show how we will deliver that. There is a wider question about forced labour in supply chains for which Great British Energy does not have responsibility, and we have outlined a number of actions for tackling the issue right across the economy. Just a few weeks ago, I hosted the first cross-Government meeting with colleagues from the Home Office, the Foreign Office and the Department for Business and Trade looking at how we can make regulations much tighter. We want to ensure that what the right hon. Gentleman wants applies across supply chains, not just in the energy space, but across the economy.

[Chris Vince (Harlow) (Lab/Co-op)]

The Minister is giving an important speech on a really important topic—a speech that I think everyone across the House will agree with. Does he agree that part of the advantage of having a Government-run GB Energy is that we will have greater control over supply chains, and whether slave labour is being used?

[Michael Shanks]

My hon. Friend is absolutely right. We want Great British Energy to be a sector leader in this area. It must meet all the standards that we expect from every other company, but we want it to go further and really demonstrate what is possible in this space. He raises a wider question about the importance of Great British Energy to delivering investment in the supply chain, so that we are delivering not just energy security through the clean power mission, but good, industrial jobs. That is what this Bill is all about.

Great British Energy will strive to be a leading example of best practice, not just in this space, but right across corporate due diligence, setting a benchmark for ethical standards in supply chain management. That involves ensuring that human rights considerations are integrated into corporate policies, procurement and suppliers’ conduct; we will draw on guidance from leading experts in the sector, such as the Helena Kennedy Centre at Sheffield Hallam University.

Lords amendment 2B will strengthen our framework. It demonstrates that both Great British Energy and the Government are absolutely committed to maintaining supply chains that are free from forced labour. I urge the House to agree to Lords amendment 2B and the position that the Government have reached on this critical issue.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

--- Later in debate ---

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

Well, this is a red-letter day: we are in the Chamber to discuss something positive that is happening with GB Energy. I commend the Minister and his colleagues for that, although it is consistent with the function of a significant U-turn in Government policy. I thank Members of both Houses for their work in bringing Lords amendment 2B to fruition.

The amendment would ensure that no material or equipment produced as a function of slave labour is used in GB Energy’s enterprises, but I heard the Minister talk about “expectation” and “striving”, which are much less unequivocal than “ensure”, so I would be very grateful if he could reassure the House that “ensure” means ensure. Consistent with comments from other hon. and right hon. Members, there is a very straightforward way to do that. It is maybe not legislatively or bureaucratically light, but this is an extremely important issue. If it does not attract a burden of administration to ensure that our collective consciences are clear, what will?

As an engineer, I know that many products that we purchase come with a certificate of conformity. In pursuance of ensuring that there is no slave labour in any enterprise of GB Energy, it would be very straightforward for the Government to mandate that a certificate of conformity must be produced for all equipment, which would explicitly guarantee that the supply chains are free of slave labour. That does not seem to be an especially demanding expectation.

I will make a final point. Can the Minister explain something to me? I am genuinely not seeing this with the clarity that I suspect he is—or maybe he is not. In what enterprises will GB Energy be involved as the decider, rather than the provider, in delivering generation, transmission or storage capacity on the ground and in a meaningful way? How will GB Energy scrutinise or mandate bills for materials to say whether they are provided from this provider or that provider? That is not my understanding of the nature of GB Energy. As has been explained in this House and elsewhere, GB Energy is a derisking device that will inject capital into the market and clear the blockages—it will not introduce purchase orders from this company or that company. I would be genuinely grateful if the Minister could clarify that.

[Michael Shanks]

I thank all hon. and right hon. Members for their contributions to this important debate. I will start with the intervention made by the hon. Member for North Dorset (Simon Hoare), which set the tone. He said that there is an important cross-party consensus on this issue, and I think that that has come through in all the contributions we have heard. Hopefully, that gives us a mandate to push further on this issue than any of our parties has done until this point. That is my genuine intent, and the hon. Gentleman’s point is very helpful.

I always welcome my exchanges with the shadow Minister, as he well knows. I thought for a moment that there was an opportunity at this very late stage for him to change his way and support investment in his own constituency through Great British Energy, but he has once again decided to use this opportunity to say to his constituents that he does not want investment and jobs. We will of course remind his constituents of that.

[Perran Moon (Camborne and Redruth) (Lab)]

Bring it down to Cornwall!

[Michael Shanks]

Cornwall is ever present in these debates. Nevertheless, however much the shadow Minister’s teeth were gritted, I do welcome his support for the approach we are taking today.

We are debating Lords amendment 2B, which, combined with the previous commitments that I have made from the Dispatch Box and that my noble Friend Lord Hunt has made in the other place, demonstrates that this Government are committed to using Great British Energy as a vehicle for taking this issue seriously. As came through in a number of the contributions, though, this is not solely the preserve of Great British Energy; it is much broader, both in the energy system and in the wider economy.

I have committed to doing some things already. I have committed to appointing a senior leader in Great British Energy who will have oversight of tackling forced labour in the supply chain; we have confirmed that Baroness O’Grady will take on that role. Many Members will know that she has significant experience in this space, and she will bring much effort to important deliberations at GB Energy. I have committed to cross-Government departmental meetings, which took place on 7 May as a starting point. I have committed to including an overarching expectation in the statement of strategic priorities, and that will be delivered within six months. We have demonstrated our unwavering commitment to tackling forced labour in supply chains, and we are resolute in our determination to go further.

[Sir Iain Duncan Smith]

The question, however, is this: at the end of it all, how will we know that the supply chains have been correctly declared? If they have not been, it will become a matter of avoidance. America checks, tests and sanctions companies that have lied about their supply chains, and that has forced wholesale change to its supply chain process. I ask the Government to learn from America and get companies such as Oritain to use forensic science to test the company supply chains about which they are suspicious.

[Michael Shanks]

I thank the right hon. Gentleman. I was going to come to his substantive contribution shortly, but I will do so now. The first point he made in his speech is important, which is that there is a real danger with the piecemeal approach he mentioned. That is partly why I have resisted the idea that Great British Energy will solve all of these issues in isolation; it clearly is not going to do so. We think it has a really important role in leading the conversation and leading the effort, and certainly in demonstrating that by its own actions, but we have to look at these issues right across Government.

The meetings I have convened are a starting point in looking seriously at where the Modern Slavery Act falls short. We are committed to doing that, and it sounds as though there is consensus across the House about looking seriously at that. That is not only for my Department, and I want to be careful about overstepping, because to avoid the work being piecemeal, it needs to be done right across Government. However, the points the right hon. Gentleman makes specifically on tracking supply chains are very helpful, and I will take them away.

The hon. Member for South Cambridgeshire (Pippa Heylings) made a point about the International Labour Organisation’s principles. Great British Energy will consider the 11 indicators of forced labour, including abuse of working and living conditions, as part of its efforts. I do not think that this Bill is the right place to get into a conversation about defining slavery. We may need to look at that, and I am not against doing so, but this Bill is about creating Great British Energy, and we need to be careful to keep these things separate.

We are already a signatory to a number of conventions, which highlights the Government’s broad support for tackling forced and compulsory labour, and we will continue to take that forward. The Home Office has produced a modern slavery action plan, which sets out the first steps in its departmental responsibilities for tackling modern slavery at its root. The plan, which will be published shortly, confirms that the Government are considering legislative vehicles for strengthening section 54 of the Modern Slavery Act.

These are clearly important issues, and I do not for a second seek to say that the Lords amendment or Great British Energy itself will solve all of them, but I think this is an important step, and I welcome all the contributions made across the House.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I basically want to thank the Minister. This has been quite a robust and rough journey, but he has listened to comments from across the House, analysed the arguments we have made and listened to the other place. I think this is now going to be a very strong Act that will help enormously to shift our global supply chains and get the transparency I think everybody in this House wants, so I thank him.

[Michael Shanks]

I thank my hon. Friend for that intervention, but more broadly, as I have said before, for her significant contribution in this space and for the way she has influenced me and others over the past few weeks on these important issues. I also thank others across the House, because it has been a real cross-party effort, and I think we are in the same place. We want to take this forward, and there is much more work to do. I want the message to be that, while this is progress, it is—as the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) put it very well—the beginning, and certainly not the end, of further work.

Without wanting to tempt fate, this is the last opportunity to speak about the Bill in this place, so I close by thanking everyone who has played a role in getting it to this stage. In particular, I thank my noble Friend Lord Hunt in the other place. I thank all the Members from all parties in this place who contributed to the Bill Committee, and the witnesses who gave evidence. I also thank the parliamentary staff who play such an important role in shepherding Bills through this place and the House of Lords. I especially thank the fantastic team of officials in the Department for Energy Security and Net Zero, who moved at incredible speed to develop the legislation, but always with good humour, which I have personally appreciated.

Great British Energy is at the heart of what the Government are setting out to achieve: delivering clean power, but delivering jobs and investment as we do it; and delivering energy security and climate leadership, owned by and for the people of this country, and headquartered in the energy capital of Europe, Aberdeen. With investments having already been made, including in community energy in Scotland today, which Members from Scotland might welcome, and investment in supply chains and much, much more, this is the big idea of our time. It will deliver on our energy objectives, but with the public owning a stake in their energy future. I am pleased that Parliament will—I hope, without tempting fate—back it today, so that it can receive Royal Assent and get on with doing what we need it to do.

[Sir Iain Duncan Smith]

On a point of order, Madam Deputy Speaker. I just want to remind the House that the Deputy Speaker in the Chair today is also sanctioned by the Chinese Government for her bravery.

Energy Security and Net Zero

Michael Shanks Excerpts

Monday 12th May 2025 Written Corrections

The following extract is from the fourth sitting of the Planning and Infrastructure Bill Committee on 29 April 2025.

[Michael Shanks]

Secondly, as clause 14 amends schedule 8 to the 1989 Act to allow the Secretary of State or Scottish Ministers to make regulations about applications made to Scottish Ministers, amendments have been made so that proposed new paragraph 1A will apply only to applications made to the Secretary of State, not to those made to Scottish Ministers.

[Official Report, Planning and Infrastructure Public Bill Committee, 29 April 2025; c. 167.]

Written correction submitted by the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks):

[Michael Shanks]

Secondly, as clause 14 amends schedule 8 to the 1989 Act to allow the Secretary of State or Scottish Ministers to make regulations about applications made to Scottish Ministers, amendments have been made so that proposed new paragraph 1A will apply only to applications made to Scottish Ministers, not to those made to the Secretary of State.

New Nuclear Projects: Wylfa

Michael Shanks Excerpts

Wednesday 7th May 2025 Westminster Hall

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

I think they call that my full Sunday title, Sir John. I thank the hon. Member for Ynys Môn (Llinos Medi) for securing this debate and also, as I said to her in the House last week, for her passion on this issue and energy projects more generally. We have debated a number of them in this Chamber over the past few months, and I am grateful for the way in which she does that.

This is a very important debate. I want to raise a few general points about the importance that the Government place on nuclear power, and then I will come to some specific points on Wylfa. First, new nuclear will play a critical role in this country’s energy mix by delivering the clean and secure home-grown energy that the country needs. As the hon. Lady said, it is increasingly clear that demand for electricity in this country is only set to increase significantly. Our estimate is that it could double by 2050, but given the current growth rate of things like AI, it is likely to be quite a conservative estimate. Nuclear will play a critical role in that energy mix.

As we adapt to a more uncertain world, as we continue to recover from the global pandemic and with all our future growth plans, nuclear’s energy security advantages make it essential. We have been clear that the role of our clean power mission is to push gas off the system, and nuclear will play a critical role alongside renewables. This is not a renewables-only drive; this is about renewables alongside nuclear. As the hon. Lady outlined, Wylfa has huge potential in that energy mix, and we are not overlooking it for a second.

I will come back to that point in more detail in a moment, but first I want to say something more generally about Wales. The hon. Lady gave us a useful history of nuclear power. Since the 1950s, Wales has played an important role in delivering nuclear power for the whole country. As she rightly outlined, the expertise and skills in Wales are extraordinary, and there is huge potential to build on those skills.

The tens of thousands of jobs that will be created by our new nuclear projects could be spread across the UK, which is why I think the opposition to new nuclear in some quarters—for example, from the SNP in Scotland—is so short-sighted. This is an economic opportunity as well as a key energy driver. Our forthcoming industrial strategy White Paper will say more about how we will support the wider energy industry in Wales and across the country.

The hon. Lady outlined the historical role of Wylfa, and she referenced decisions going back to the year after I was born, which brings it into stark contrast. In its 44 years of operation, the former nuclear power station at Wylfa generated enough safe, low-carbon and home-grown electricity to power 2 million homes a year, as well as supporting hundreds of good jobs in local communities. I pay tribute to all those who worked in the former plant for their expertise in running an incredibly safe operation over 40 years.

[Liz Saville Roberts]

I would be grateful if the Minister could provide an assurance on continuous decommissioning at both Trawsfynydd and Wylfa. At Trawsfynydd, decommissioning is currently providing 276 very well-paid jobs. Trawsfynydd is the United Kingdom’s “lead and learn” site and could well be the first fully decommissioned nuclear site in Europe. However, we need an assurance that decommissioning will be continuous and that there will be sufficient funding, beyond this year and into the future, to ensure effective decommissioning, which will also give the public confidence in nuclear power into the future.

[Michael Shanks]

I thank the right hon. Lady for that point. Trawsfynydd—I think that is the correct pronunciation —is potentially also an important site for future nuclear, but she is right to highlight decommissioning. I am sure the Minister for nuclear, my noble Friend Lord Hunt, will be happy to discuss this in more detail, but clearly decommissioning is important. It creates a lot of jobs and skills, as well as developing future economic opportunities—it might be new nuclear, but it might also be other things. I am happy to volunteer my noble Friend to speak to the right hon. Lady about this, but it is certainly something we take very seriously. With something like nuclear power, we also have a responsibility to decommission it responsibly, which is part of the story of nuclear, alongside the years of generating.

[Mr Alex Barros-Curtis (Cardiff West) (Lab)]

Last year’s Welsh Labour manifesto said that our two Labour Governments in Wales would explore the opportunities for new nuclear at Wylfa. Could my hon. Friend elaborate a little on that, bearing in mind the extensive history provided by the hon. Member for Ynys Môn (Llinos Medi) gave? I was listening carefully, and it was excellent to listen to. We have, of course, been in power for only 10 months, after 14 years of failure. Will my hon. Friend expand a little more on that point, further to the commitment we made to the electorate in Wales last year?

[Michael Shanks]

I thank my hon. Friend, not least because that is the very next part of my speech, so it is excellent timing. The history of Wylfa is important to our energy story, but so is the future. The potential of the site has long been recognised. I recognise the point made by the hon. Member for Ynys Môn that, after several years of hard work, the withdrawal in 2020 of Horizon’s plans to develop a new large-scale nuclear power station at the site was a setback for the whole country, but particularly for the local community. She rightly outlined the role that such projects can play in developing skills and good, very well-paid jobs, which often have salaries considerably above the average. It is really important that we move those projects forward.

I will reflect on what my hon. Friend the Member for Cardiff West (Mr Barros-Curtis) said. It has been nine months since this Government came into power, and our in-tray has had no shortage of issues from the previous Government to deal with—I note that no Conservative Members are present at this debate—but delay and dither is by far the biggest issue that we have had to deal with in our energy system. We have not been moving forward at pace on several key decisions that were taken, and I am afraid that Horizon is just one of many examples of delays and setbacks in nuclear project development since 2010.

It is a real disappointment that not a single nuclear power station was completed, or even progressed significantly, in that period, and the previous Government should take responsibility. Too many proposals have fallen by the wayside, leading to the loss of huge opportunities not only for our energy system but for local economies right across the country.

We are determined—I say this very clearly—to enable faster and more sustainable nuclear project development around the country. We have been clear that we are in favour of new nuclear. We want to create an investment landscape in which investors come to invest in nuclear projects in this country, and in which we give the certainty that nuclear will play a key part in our energy mix long into the future. We are taking important steps to kick-start new nuclear in Britain by working closely with EDF to get Hinkley Point C over the line, while Sizewell C is making good progress. However, the final investment decision is for the spending review. Great British Nuclear, the Government’s expert nuclear delivery body, is driving forward the SMR competition for UK deployment. Final decisions on that competition will be taken very soon.

I will highlight other actions we are taking to make progress.

[Liz Saville Roberts]

Will the Minister provide any information on whether there will be updates on sitings for SMRs? We understand that the siting is being reconsidered, and businesses that are engaged with a design are very keen to know where the likely sites will be.

[Michael Shanks]

I will come on to the question of siting in a moment. I do not want to be drawn into the particulars of the SMR competition because Ministers are not involved in that at the moment. That process is under way, and we are moving forward with it at pace.

First, our targets for clean power are really important. We have set out the clean power mission for 2030, as well as the wider question of decarbonising the economy by 2050, in part because we want to drive momentum in the energy space for investment into sectors like new nuclear. Nuclear power is a crucial part of our toolkit to deliver energy security and decarbonisation, and we have said that our striving towards clean power does not end in 2030. We are in a sprint because that is necessary for our constituents, who are paying far too much for their bills, but the effort will continue long into the 2030s and 2040s. That is when nuclear will particularly play a critical role.

Secondly, the new national policy statements reflect a new era of nuclear. Wylfa was, of course, one of eight sites designated for new nuclear in the EN-6 national policy statement, which recognised the site’s future potential. Nothing that we are doing takes away from that crucial future potential, but we recognise that the new range of technologies in nuclear open up a series of sites that are different from the eight that were fixed for larger-scale nuclear in the past.

National policy statement EN-7 is all about turbocharging our ambitions for new nuclear: not taking away from sites that were already designated but opening up a range of new sites. It sets out a refreshed planning framework for new nuclear reactors, including, as we have discussed, small and advanced modular reactors.

The proposed planning framework is robust, transparent and agile, and it is about empowering developers to identify more sites across the UK. Clearly, those must be set against a very robust set of siting criteria—we are not saying that new nuclear can be built anywhere in the country—but there are a lot more sites for SMRs and AMRs than there were in the past.

Thirdly, and this comes to a point the hon. Member for Ynys Môn made about regulation, we have been keen to cut outdated and bureaucratic rules that are holding back investment, but clearly we also have in this country one of the most robust sets of regulations for nuclear, which is important for the public to have confidence in nuclear energy. It is also why we have had decade upon decade of incredibly safe nuclear generation in this country. We will maintain robust regulation, but we will update it to make sure that we are driving forward investment. The Prime Minister recently announced that John Fingleton will lead a nuclear regulatory taskforce to identify opportunities for better regulation in the nuclear space, particularly to speed up delivery.

Fourthly, we are tackling one of the biggest reasons for delays and uncertainty head-on by taking bold action on the connections queue in the GB grid. Connections reform is about helping viable clean energy projects connect faster, and it is about giving investors the certainty that, if they come forward to develop a project, they will be able to connect to the grid much faster. Future nuclear projects will benefit from those reforms, freeing up the more than 700 GW currently sitting in the queue and freeing up a lot of that capacity for important future projects.

Returning to Wylfa, as the hon. Member for Ynys Môn noted, Great British Nuclear purchased the site alongside the site in Gloucestershire at Oldbury, which gives us a real opportunity to make strategic decisions. Although I hear the call to move faster on those decisions, it is crucial that we take time to make sure that they are fully informed. The question of how we finance any such projects is a critical one for Government to think about.

As we fix the foundations of new nuclear in this country, it tees us up for rapid future success. We will make sure that we drive forward the potential for communities to benefit from the supply chains and the construction that go alongside those sites. I reiterate that we are hugely ambitious and excited about the opportunity for new nuclear in this country. I recognise the frustration that the past 14 years of dither and delay have meant that it seems like we are not making as much progress on those nuclear sites as possible. I gently ask that we are given the space and opportunity to drive forward our ambitions for nuclear. After more than nine months, we have demonstrated the pace at which we want to move. We will do the same on nuclear, but we need the time to set that out fully.

I close by thanking the hon. Member for Ynys Môn again for securing this important debate. I know she will continue to engage with the Minister for nuclear, my noble Friend Lord Hunt, on these questions. We are ambitious for Wylfa and for other sites. The hon. Lady is right to push because “further and faster” is the mantra of this Government in a whole range of areas. She is also right to highlight the huge potential for her community, but also for our energy security across the country, of moving forward with new nuclear as part of our energy mix.

I thank all hon. and right hon. Members for participating in this debate.

Question put and agreed to.

Energy Resilience

Michael Shanks Excerpts

Tuesday 6th May 2025 Westminster Hall

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

Thank you, Mr Efford, for chairing this debate. I thank my hon. Friend the Member for Worcester (Tom Collins) for securing it and for all his experience in this area, which is of great value to me and the Government. It is an important topic. I will speak more broadly about the issue of energy resilience, and then come to some of the specific points that he raised. As I said in the House last week, maintaining this country’s energy resilience is a key priority for the Government. As my hon. Friend rightly pointed out, it goes hand in hand with us taking, as fast as possible, the opportunities from new technologies on our path to net zero.

In the context of the widespread power outages experienced across the Iberian peninsula last week, this debate is particularly timely. I praise my hon. Friend for his significant foresight in securing the debate many weeks before both of the incidents that he referred to; that is a real skill that we might come back to. I will repeat what I said in the House last week about all those who were affected. We clearly saw significant disruption in Spain and Portugal on our television screens here, but I was glad that power was restored remarkably quickly.

My thoughts are with all those who were affected, and with those who are now carrying out the work to investigate exactly what happened. A significant number of unfounded claims and speculations have been shared by Members of this House, and across social media, about the cause of the disruption. Clearly, given it was such a significant failure, it will take time for the Spanish network operator to carry out an investigation into its exact cause, and it is important that we wait for that statement before rushing to any kind of judgment.

Turning back to the UK, Great Britain has a highly resilient energy network, largely because of how diverse it is. In recent years, although we have seen high energy prices, our energy supply has remained reliable because we are supplied from more than one source, including the UK continental shelf, our long-term energy partners such as Norway, international markets for liquefied natural gas and interconnectors to the European continent. That means that we are not reliant on any one particular supplier for security of energy supplies, and we are confident that the system operators have the tools that they need to effectively balance supply and demand in a wide range of scenarios all year round. As my hon. Friend set out, storage is also an important flexibility tool in the GB system, allowing us to respond to short-term changes in supply and demand, especially during colder months.

To further protect consumers, Ofgem sets annual targets on customer interruptions and customer minutes lost, which means that companies themselves are directly incentivised to reduce the number of interruptions, no matter the cause. Of course, I work closely with the National Energy System Operator and Ofgem to ensure that resilience is built into our networks wherever possible.

The hon. Member for Strangford (Jim Shannon), who is an ever-present voice in these debates, is no longer in his place, but I wanted to give my regular response to him: although I take the issues of energy in Northern Ireland very seriously, they are devolved to the Northern Ireland Executive and not my immediate responsibility. I think he probably knew that that was what I was going to say anyway.

My hon. Friend the Member for Worcester raised our journey to net zero and what we need to do to ensure resilience as the system decarbonises. We are obviously committed to maintaining current levels of resilience and reliability through collaborative work with industry, the regulator and other stakeholders, and there is a variety of ways in which we can do that.

Obviously, the most common cause of any disruption in our network, here in the UK, is storms and weather events. We have seen lessons learned from storms such as Storm Arwen, which led us to introduce a number of resilience measures. There is also the role of critical new technologies, such as hydrogen, which my hon. Friend raised throughout his speech and can be used in energy resilience. He is correct, of course, that we now have an opportunity to design a clean energy system, and that is why NESO is carrying out new functions that will shape resilience policies on our journey to clean power.

I will briefly talk about what we learn from incidents. Our system is remarkably resilient, but, of course, no system is immune from disruption entirely, so we must plan for all eventualities and learn from incidents when they happen. We do that through working closely with the energy industry to ensure that robust plans are in place. We learn from every incident, in strong partnership with others.

My hon. Friend rightly raised the dependencies in our energy system. The recent example from the Iberian peninsula really brought home just how much our lives are dependent on electricity in one form or another. The point about our telecoms and communications systems, which are so reliant on mains electricity now, is really important for us to consider in these resilience plans; we must make sure that we have back-ups in place. That complex interdependency was also demonstrated by the recent fire at the substation in Hayes, which resulted in the closure of Heathrow airport. Such incidents are incredibly rare, but they occasionally occur in a complex system with many thousands of assets, such as ours.

The Department for Energy Security and Net Zero continues to lead cross-Government work with the Cabinet Office to enhance the resilience of all critical sectors to major energy risks, such as those listed on the national risk register. Events in the Iberian peninsula last week, as well as those in Heathrow in March, highlight just how crucial electricity is to our wider system.

My hon. Friend the Member for Worcester was right to point out that, as we move to a clean power system, the question of storage will be key. That is why I was delighted the Government announced the funding to build the first long-duration energy storage assets in more than 40 years. We have worked to set out the cap and floor scheme so that major infrastructure projects can be delivered. We look forward to those projects coming forward in due course.

My hon. Friend highlighted the role of hydrogen. Although I am not directly responsible for hydrogen, I am as excited by the opportunities it presents as my colleagues in the Department are. It can play a key role in our mission to make the UK a clean energy superpower by delivering new clean energy industries. Although it can provide near-zero emission hydrogen, particularly green hydrogen, as my hon. Friend said, it is not yet available at scale, but there is a real opportunity. He made the point about trying to bring people together to recognise that this is a really exciting opportunity and moment. It is everything that the Government are about through our approach to delivering the clean power mission and unlocking the potential of these more nascent technologies to provide significant resource into the future. That is an important point to put on the record. We are very supportive of what hydrogen can do in our system in future.

This is a very important debate. The question of energy resilience is one that we will return to, quite rightly, because it is never a settled subject. The Government have credible plans in place that we test robustly at regular intervals to make sure that, in the unlikely event they are needed, they work as we intend. It is clearly important that we revisit them regularly to make sure they are as detailed as possible.

I reiterate the point that I made in the House of Commons last week: the UK has a secure and resilient energy supply. Our mission to make Britain a clean energy superpower is the best route to improve our energy security into the future. When we have experienced incidents that threaten our energy resilience, we have used those as opportunities to prepare better for future threats. Preparing for outages is an ongoing task that Government, industry and the regulator collaborate on. We are also taking this opportunity to build not just the clean power system that will deliver climate leadership, energy security and bring down bills in the long term, but the storage assets and everything necessary to make sure we can capture clean power and utilise it when we need it most.

Once again, I thank my hon. Friend the Member for Worcester not just for securing this timely debate and the points that he has made on storage and on hydrogen in particular, but for all the work that he is doing generally in Parliament on these really important issues. As we progress towards clean power by 2030 at pace, rapidly deploying new infrastructure, we will continue to work with all those in the energy sector to maintain the high levels of resilience and security that this country needs.

Question put and agreed to.

Electricity Security and Decarbonisation: Government Responses

Michael Shanks Excerpts

Tuesday 6th May 2025 Written Statements

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

I am tabling this statement to inform Members of two publications relating to the capacity market. Both publications are Government responses to the recent consultation and call for evidence on proposals to maintain our electricity security and enable flexible capacity to decarbonise. This supports our goals of making Britain a clean energy superpower by 2030 and accelerating progress to net zero.

The Government are committed to delivering clean power by 2030 and accelerating progress towards net zero, while ensuring the security of supply. Making Britain a clean energy superpower by 2030 is one of the Prime Minister’s five missions. Being on track for clean power 2030 is the Prime Minister’s plan for change milestone for this Parliament.

To deliver this mission, we will rely even more on renewable power. This will result in a wholesale shift in our long-term power system. The variable nature of renewables makes it critical that we have sufficient flexible capacity that can be ramped up quickly when generation from renewable sources is low, such as on dark, still days. The clean power action plan published in December 2024 projected that we will need 40 GW to 50 GW of dispatchable and long-duration flexible capacity in 2030 to support our power system and maintain security of supply.

This will require accelerated deployment of low carbon flexible technologies. The Government are already investing in low carbon technologies to support the transition away from unabated gas. In the meantime, the clean power action plan is clear that we will continue to rely on around 35 GW of existing unabated gas, until it can be safely replaced by low carbon alternatives that can provide the flexibility needed to keep the system balanced at all times.

Since its introduction in 2014, the capacity market has acted to secure sufficient capacity to ensure consistent and reliable electricity generation. In October 2024, we consulted on proposed changes to the CM to help maintain our existing ageing gas capacity. The Government response to the CM consultation commits to supporting the economic case for lifetime extension of ageing plants, vital for security of supply. It will do this by lowering the scale of planned works needed to access three-year CM agreements.

While we need to maintain our existing unabated gas capacity, the clean power action plan is clear that we will see a fundamental shift in the role and frequency of unabated gas generation. Unabated gas will move from generating almost every day, to an important strategic reserve role, used only when essential. By 2030, unabated gas generation will make up no more than 5% of Great Britain’s total generation in a typical weather year.

The Government response published today reiterates our intention to ensure that unabated gas plants can decarbonise once low carbon flexible technologies are available. We are introducing two further CM reforms:

New decarbonisation readiness legislation comes into effect from February 2026 and will ensure that all substantially refurbishing and new combustion plants are built decarbonisation-ready. We will modify the CM to ensure that all plants prequalifying for the CM in 2025 that would be captured under the new DR legislation commit to comply with the DR requirements.

We will introduce a first managed exit pathway to enable unabated gas generators with multiyear CM agreements to exit early without penalty and transfer to bespoke support, facilitating decarbonisation by retrofitting carbon capture.

We are also publishing a Government response to the CM call for evidence, which aimed to inform further option development to support the decarbonisation of unabated gas and the approach to developing longer-term views of future capacity requirements and supply. This Government response summarises the feedback received.

The CM reforms we are introducing will ensure that the CM can continue to uphold its primary objective of ensuring security of supply, while also playing a crucial role in achieving the clean power mission.

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