Oral Answers to Questions
Michael Shanks Excerpts(2 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Community energy will play a pivotal role in our mission for clean power. Last week, we published the clean power action plan, which contained more information about how we will meet this world-leading mission, and the report confirmed that community energy will play an important role, particularly through Great British Energy.
Olly Glover
Renewable energy schemes on community buildings in my Oxfordshire constituency of Didcot and Wantage, supported by the Low Carbon Hub in Oxford, have mostly benefited building owners up to now. Would the Minister support more flexibility in local energy systems and allow local energy trading to get more support for renewable energy schemes in our communities, so that more local people can directly benefit?
Michael Shanks
The hon. Gentleman makes an incredibly important point about how local community groups can benefit from not just hosting the community energy, but from being able to sell locally. We have had a number of conversations on this topic already. I most recently met the community energy contact group, which does a lot of work to look at what regulations there might be, and we are happy to look at any proposals that come forward. We want to see a revolution in community energy right across the country so that more communities can benefit.
Mr Toby Perkins (Chesterfield) (Lab)
Under the previous Government, we had an energy market that worked for nobody. It was bad for consumers, and we also saw many energy companies go out of business as the Government lost any grip on the industry. Does my hon. Friend agree that with the greater stability we have under this new Labour Government, there are opportunities for community energy coming forward as part of the recovery of our whole energy infrastructure?
Michael Shanks
It will not surprise the House that I agree wholeheartedly with my hon. Friend, who, as always, makes an incredibly important point. He is right that stability is key, but so too is this Government’s commitment to invest in community energy. We have committed to upwards of 8 GW of energy from community sources over the course of this Parliament up to 2030. That commitment ensures not just that we have an energy mix where communities benefit, but that they benefit from the economic and social advantages of owning the energy they produce.
Sarah Dyke (Glastonbury and Somerton) (LD)
Community energy schemes provide a great opportunity for local communities to take ownership of clean energy production. In Glastonbury and Somerton, we have seen the benefits as Avalon Community Energy projects around Glastonbury are projected to save 1,000 tonnes of carbon per year. How will the Minister support community energy schemes and ensure that they play a fair and full role in creating clean energy?
Michael Shanks
The hon. Member has raised community energy on a number of occasions in this place, and I know she is a champion of it. She is right to highlight the examples of where community energy can make a huge difference. One of the key areas we want to drive forward is the local power plan, which will be delivered by Great British Energy. Unfortunately, her party did not in the end support the creation of Great British Energy, but I hope they will change that position and see the huge advantages of investing through Great British Energy in schemes like the one she mentioned, but also of helping to build capacity in community groups so that they are capable of driving those projects forward.
Brian Leishman (Alloa and Grangemouth) (Lab)
I declare the interest that I am a Unite the union member.
Communities all across Scotland rely on the Grangemouth refinery for their energy. As closure looms, Unite has given the Government a plan that will save jobs, help hit sustainable aviation fuel targets and build new green industries for the future. It is not too late to save those jobs and achieve the just transition that my community desperately needs. Will the Secretary of State agree that the plan has great potential and agree to meet Unite to see what the Government can do to achieve a truly just transition for the refinery workers and keep Scotland’s only refinery working?
Michael Shanks
As my hon. Friend knows, we have met Unite on a number of occasions over the past few months since Petroineos made the disappointing decision to follow through on its closure plans for the Grangemouth refinery. It is important that we look at every possible option, and we have done.
It is also important that the Government are clear that we want to see a long-term sustainable future for the refinery site. That is why we invested in Project Willow, which at the moment is coming up with credible investable propositions for the site. We want to protect the workers and do whatever we can to ensure a just transition at Grangemouth and for industry right across the country, but those options need to be long-term and sustainable so that we do not drive workers back into this process again a few years down the line. We are committed to ensuring that we invest in long-term sustainable propositions for the site, and of course we will meet anyone and discuss any propositions to help make that happen.
Pippa Heylings (South Cambridgeshire) (LD)
It is so good to hear the Minister affirm the need to bring the public onside, as well as private sector investment, to achieve the transformation towards green power and net zero. The Liberal Democrats support Great British Energy if community energy is at the centre of the Great British Energy Bill. Our colleagues in the Lords are debating amendments relating to direct participation in and benefit from community energy. Will the Minister agree to those proposals if they come to this House?
Michael Shanks
In the spirit of Christmas, I thank the hon. Lady for all the engagement and discussions we have had—[Interruption.] The Conservative Front Benchers groan, but I have joy for their party at Christmas as well. We are absolutely committed to community energy, which was in our manifesto. At every stage of the Bill, we have committed to community energy being right at the heart of what Great British Energy will do. If their lordships make any amendments in their consideration of the Bill, we will of course consider those amendments when the Bill comes back to this place. However, I say gently to the hon. Lady that her party did not support Great British Energy, so it cannot now claim credit for the things that Great British Energy will deliver.
Robbie Moore (Keighley and Ilkley) (Con)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
We have made clear, through the clean power action plan that we announced last week, that where communities host clean energy infrastructure, we will ensure that they benefit from it. There are many options in that area, including community funds and direct support for households, and we are exploring all those options to ensure that communities can benefit from the clean power mission.
Robbie Moore
There is a proposal to build 65 wind turbines on protected peatland in the neighbouring Calderdale council area, which I am staunchly against. To make matters worse, if the development is approved, my constituents will not benefit from any community benefit scheme, despite being on the periphery of the proposed location. How will the Secretary of State ensure that my constituents get their fair share of any community benefit scheme should the proposal be approved?
Michael Shanks
I cannot comment on the specific details of the case. However, I would like to know more about why the hon. Gentleman’s community might not benefit, because the aim is for all communities affected by hosting infrastructure to benefit in different ways. We are looking at the options—be they money off bills, or the community benefit funds that exist at the moment—as we work through the answers to the consultation launched by the previous Government. However, we are clear that if communities host infrastructure that is nationally important and benefits the whole country, they should benefit from doing so.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
Community benefits come in many different forms—in my constituency, Ørsted has contributed £1 million towards Horizon Youth Zone, and RWE is supporting Projekt Renewable, which is a box park learning zone—but the most wide-reaching benefit is to people’s pockets. Schemes such as the Octopus fan club bring down people’s bills when the use of renewables is at its highest. How can other energy retailers deliver similar savings for consumers?
Michael Shanks
My hon. Friend asks an extremely important question. All communities should benefit from the transformation that we want to make to the energy system. Part of the answer is improving how we use smart systems right across the energy system, so that people have much more consumer-led flexibility in their options—we are moving forward with that. In the clean power action plan that we published last week, we committed to doing much more to give people the power to take advantage of some of the opportunities she mentions.
Joy Morrissey (Beaconsfield) (Con)
Community engagement and funding are important. With large-scale solar farms planned for agricultural land, does the Secretary of State think that there are any circumstances in which local communities might know better than him?
Michael Shanks
Communities are, and will always be, able to speak about the plans for their local area, and to contribute to consultations and planning applications—we will not change anything about that. However, it is important to say that nationally important infrastructure will need to be built somewhere if we are to have the clean power future and energy security that everybody in this country needs. I gently say to the hon. Lady that, even in the most extreme statistics, less than 1% of land in this country would be used to build for solar. Either the Conservatives are in favour of keeping us on the rollercoaster of volatile fossil fuels, or they are in favour of building clean power. Her party used to be in favour of net zero, but now it seems to be running away from it at speed.
Amanda Hack (North West Leicestershire) (Lab)
Perran Moon (Camborne and Redruth) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
My hon. Friend is right to suggest that offshore wind, especially floating offshore wind, will play a critical role in our pathway to clean power. We will consider any option to ensure that we get many “test and demonstrate” projects through to delivery, and we will say more in coming weeks about what the next round of contracts for difference will look like.
Monica Harding (Esher and Walton) (LD)
More than 24,000 homes in my constituency have an energy performance certificate banding of D or worse, which means 50,000 tonnes of avoidable carbon dioxide emissions and higher energy bills for my constituents. However, the rate of insulation upgrades is too slow for us to meet the Government’s goal of universal band C ratings by 2035. Will the Minister commit herself with more urgency to an emergency home insulation programme with targeted support for those on low incomes?
Amanda Hack (North West Leicestershire) (Lab)
Michael Shanks
My hon. Friend makes an important point about rolling out charging infrastructure to all parts of the country, and we are working on that with colleagues in the Department for Transport. Local distribution networks in rural areas are incredibly important, and introducing greater access to the grid—including through Ofgem’s approval of £22 billion to improve distribution networks—will enable us to roll out EV infrastructure in rural areas throughout the country.
Capacity Market: December Publications
Michael Shanks Excerpts(2 weeks, 1 day ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I am tabling this statement to inform members of three publications relating to the capacity market. The publications consist of a consultation on improvements to capacity market rules and treatment of consumer-led flexibility in the capacity market; a call for evidence inviting further views on improvements to consumer-led flexibility in the capacity market; and a statutory report summarising the capacity market’s performance over the last five years.
This Government have 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. To deliver this mission, we will increasingly rely on renewable power. The Government have set targets to double onshore wind, treble solar and quadruple offshore wind by 2030.
Introduced in 2014, the capacity market provides Great Britain with its ultimate safeguard to ensure security of supply. It serves to ensure enough capacity is available to provide a reliable electricity supply during peak demand periods and system stress events. The funding provided through the capacity market incentivises investment in new and existing generation, interconnectors, batteries, and demand side response mechanisms that enable consumer-led flexibility to ensure sufficient available capacity when required. This capacity is acquired through annual auctions held at intervals four years ahead and one year ahead of its delivery years. The Government regularly amend the capacity market prior to auction cycles to ensure it is cost-effective and meets broader strategic objectives such as clean power by 2030.
The transition to clean power will see changes in the patterns of energy production and consumption, with flexibility playing an increasingly important role. In October, we published a consultation and call for evidence exploring proposals to maintain security of supply and to enable flexible generation capacity to decarbonise. Today, we build upon this work by publishing a consultation and call for evidence on proposals to modernise the capacity market rules and improve consumer-led flexibility within the capacity market.
Consumer-led flexibility involves voluntary actions taken freely and directly by energy consumers to shift their electricity use. This includes residential customers using smart technologies, such as smart-charging EVs and heat pumps, as well as industrial and commercial units adjusting demand and utilising behind-the-meter generation or storage. This enables consumers to be rewarded with cheaper electricity by flexibly adjusting their usage to times of lower demand on the grid.
The consultation sets out 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 aggregated domestic demand-side response portfolios increases to enable increased consumer-led flexibility, it is important that capacity market rules are updated to better incorporate and enable access from emerging technologies that can respond flexibly to times of high energy demand. It also seeks views on the introduction of a termination fee for new demand-side response mechanisms 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 consultation also outlines proposals on capacity market rule improvements. The capacity market rules govern how the capacity market operates. It is integral that the rules are clear and consistent in their operation to ensure the market remains accessible for new entrants seeking to invest in new sources of capacity. The consultation outlines proposals to improve the accessibility and clarity of the capacity market rules to ensure greater understanding and adherence to them. The proposed changes 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 that are no longer required. These changes should ensure the capacity market rules remain fit for purpose and continue to allow new, innovative technologies to participate in the capacity market without facing unnecessary administrative hurdles. The proposed changes also extend a policy to allow existing generators to use data older than 24 months to pre-qualify for auctions held in 2026. This will further increase auction competitiveness and lower the costs of the capacity market for consumers’ energy bills.
The call for evidence seeks views on potential changes to the capacity market to improve consumer-led flexibility. It builds on proposals laid out in the capacity market phase 2 consultation, which was published in October 2023 to invite views on how the demand-side response mechanisms that enable consumer-led flexibility could be better categorised and integrated into the capacity market. It also seeks feedback on how these mechanisms can be better supported through improved portfolio management, while maintaining the high levels of delivery assurance expected within the capacity market.
Finally, we have published the second statutory five-year review, covering the years 2019 to 2024 of the capacity market’s performance—referred to as the 10-year review. This review provides a summary of how the capacity market has performed against its original objectives. It draws on evidence gathered from a Government-commissioned independent process and impact evaluation of the capacity market scheme in September 2021, and on responses to a call for evidence published in October 2023.
The review has taken place as the Government consider larger strategic questions through the review of electricity market arrangements programme, whose remit includes how a future capacity market can meet Government objectives on security of supply. The review does not seek to pre-empt the outcomes of the review of electricity market arrangements.
These publications consider actions to improve accessibility to and functionality of the capacity market, while continuing to uphold its primary objective of ensuring security of supply. As the capacity market reaches its 10-year milestone as a key pillar at the heart of the Government’s strategy for ensuring security of electricity supply in Great Britain, these proposals seek to ensure that it remains fit for purpose and continues to play a crucial role in achieving the clean power mission.
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Floating Offshore Wind: Celtic Sea
Michael Shanks Excerpts(2 weeks, 5 days ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
It is a pleasure to serve under your chairmanship this afternoon, Mr Efford. I congratulate my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) on securing this debate and for all the work she does in championing her area, and the Celtic sea more broadly. We have had a number of conversations and debates on energy-related policy and she is a real champion for her constituency.
I thank all hon. Members this afternoon for their passionate contributions to the debate. I do not know what the collective noun is for a group of Cornish Celtic tigers and one Welsh one, but they made fantastic contributions and I think that gives us a sense of how seriously new MPs are taking the future of their constituencies. We should be proud of that.
The key issues that have been raised today, of the grid, supply chains, skills, planning, and getting the balance right so that we bring communities along with us in much of this—the hon. Member for North Cornwall (Ben Maguire) put that well—are important. It was nice to hear the hon. Gentleman speak about the coalition Government, as we do not hear enough about them these days. I encourage him to say much more about them in future debates, but I suspect that he will not.
Let me first speak about the context of the debate and I will then answer some of the specific questions. I think the “why” of our being in this race and transition is important. Why are we pushing to deliver clean power by 2030? The truth is that it is an imperative if we are going to meet our long-term goal of a net zero economy and deliver economic growth and energy security. They are intrinsically linked.
A number of hon. Members have raised the point about the potential of jobs in industry in communities that have, in many cases, been forgotten for a long time. The rates of poverty and underemployment in those communities underlines how important it is that we bring about new opportunities. I think the point about legacy raised by my hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell). This is not just a transition for the sake of a transition; the aim is to deliver good, well-paid jobs for future generations and to make it a prosperous transition for many communities.
We are in no way missing the scale of the challenge. Delivering clean power by 2030 will require us to rip up the rule book on how Governments deliver big projects and to take a radically different approach to how we deliver change at pace. It means working in lockstep with communities and with the private sector to rapidly address the barriers that hold us back, which have all been raised today, so that we can deliver unprecedented levels of new clean energy infrastructure.
The Government received the National Energy System Operator’s advice on achieving a clean power system by 2030. It shows that this is not only achievable, but can create a cheaper, more secure system. The advice will inform the Government’s clean power 2030 action plan, which will be published imminently and will set out our route to decarbonising the electricity grid with the aims of protecting billpayers from volatile gas prices, strengthening Britain’s energy security and accelerating us towards net zero.
I hope all hon. Members will agree that we are on the cusp of a once-in-a-generation transformation of our energy system, led by a Government that is determined not to be a passenger on the big questions of the day, but, as my hon. Friend the Member for Camborne and Redruth (Perran Moon) put it, to drive forward radical change. The infrastructure that we deploy now and in the years ahead will set in train decades of energy security, stability, and prosperity for every part of the UK. Key to that will be the role played by offshore wind and, in particular, floating offshore wind. I will focus on that in the rest of my remarks.
Offshore wind will play a crucial role in our mission to make Britain a clean energy superpower and deliver clean power by 2030. At 14.8 GW of generation, we have the highest deployment in Europe and the second highest in the world. As my hon. Friend the Member for Camborne and Redruth said so eloquently, the UK is a global leader. These days there are not many things in which we can still have a claim to be that, but this is one that we must ensure we maintain.
The new technology unlocks deeper areas of the seabed that can benefit from stronger and more consistent winds, helping us to secure our energy supply and to deliver on our statutory decarbonisation obligations. Our floating offshore capacity is second only to Norway. At around 25 GW, we have the largest pipeline of floating offshore projects anywhere in the world. Of course, in the Celtic sea, there is enormous potential for floating offshore wind, and we are determined to take advantage of the opportunities that that represents. Earlier this year, the floating offshore wind taskforce estimated that floating offshore wind could contribute £47 billion in GVA to the UK economy by 2050 and support up to 97,000 jobs across the country, so we are hard at work, right across Government and in the private sector, to make sure that we realise the vast potential of this opportunity.
The test and demonstration projects, which a number of hon. Members have rightly raised, total 432 MW of capacity in development in the Celtic sea. They are crucial not just for the capacity that they generate, but for helping us to understand the supply chains and the development and for building the skills in the future. We want to see many of these projects succeed, and Government are doing everything we can to support the projects.
Under the offshore wind leasing round that the Crown Estate recently launched, a further 4.5 GW of floating wind capacity in the region will have an impact of up to 5,300 new jobs and a £1.4 billion boost to the economy. We are determined that by working together with the Crown Estate on an innovative approach to this leasing round, we can ensure that there is new industry that provides social and economic opportunities for communities right across the country. It is important for us to say that this is this Government’s absolutely key priority, that we are not agnostic on the industrial future of this country and that we want to see the good, well-paid jobs here as well. My hon. Friend the Member for Camborne and Redruth rightly highlighted the example of Kincardine, and there are other projects where all the parts were manufactured abroad and towed into our waters simply to start generating. That is the part of this that we do not want to see again. We want to see the good, well-paid jobs here.
That is why the Crown Estate has launched a £50 million supply chain accelerator to fund and accelerate supply chain projects. The 13 successful organisations are set to receive funding in the initial round. Just yesterday we were able to announce more details on these. It is the case that £5 million of funding was awarded to kick-start a range of projects across Great Britain, contributing to a combined development investment of more than £9 million, with £400 million of capital investment. As has been mentioned, the partnership that Great British Energy, the first publicly owned energy company in 70 years, has with the Crown Estate is about trying to drive forward even more of those opportunities right across the country.
The issue of ports has been mentioned by a number of hon. Members. They clearly will play a vital role in the deployment and maintenance of offshore wind infrastructure. Up to £4 billion of investment is required by 2040 to support the roll-out of floating offshore wind. That is why the FLOWMIS scheme, which is providing grant funding to support the development of port infrastructure, is so important.
The shadow spokesperson, the hon. Member for Weald of Kent (Katie Lam), rightly referenced the importance of Port Talbot and the port of Cromarty Firth in the FLOWMIS scheme. We are moving forward due diligence on that as quickly as possible. It is one of a number of in-progress decisions that we inherited from the previous Government, on which we are moving as quickly as possible to actually deliver, so that the funding can be put to good use as quickly as possible. It goes hand in hand with the creation of the national wealth fund, which will invest at least £5.8 billion of capital in the five sectors announced in our manifesto, including port infrastructure. That comes alongside some of the work already being done by the NWF in Ardersier port, the port of Tyne and Teesworks. To understand the barriers to port infrastructure, we are working closely with the ports task and finish group, led by RenewableUK, to ensure that we are building on the work that has already been done.
On the wider point of working together, which my hon. Friend the Member for Truro and Falmouth raised earlier, DESNZ has a standing invitation to the Cornwall FLOW Commission, which Cornwall council is involved in. Officials regularly engage with all councils, including Cornwall council, on this and many other issues, and we are very happy to do more.
Let me turn, finally, to the point about industry. In the spring, we will publish the Government’s industrial strategy, which is our commitment to ensuring that good, well-paid and trade-unionised jobs come to these shores to deliver the energy transition as well as to a number of other sectors. Most recently, we announced the clean industry bonus as part of the CfD scheme, which rewards fixed and floating offshore wind developers that choose to invest in the UK’s poorest communities or in cleaner manufacturing facilities. A portion of that budget is ringfenced for floating offshore wind components.
On the broader points that hon. Members raised about the next contracts for difference rounds, we will say more about auction round 7 in due course. Clearly, it is important to recognise how much the industry has moved since the abject failure under the previous Government in auction round 5, in which much of the sector was flat on its back. We have moved as quickly as possible on AR6 to get projects over the line. We want to see more of these projects succeed, and we will have more to say imminently on AR7. There will also be a consultation on that process.
I once again thank my hon. Friend the Member for Truro and Falmouth for bringing forward this debate, and I thank all hon. Members for their contributions and their real commitment to this issue. This is a Government who are determined to ensure that we realise our potential in communities right across this country and drive towards clean power by 2030. That is not as an end in itself, but because it will make energy in Britain cleaner, cheaper and more secure for our entire nation, reinvigorate long-neglected supply chains in clean energy and engineering, and return a sense of pride and prosperity to all parts of this country.
The road ahead will be challenging—no one comes into government just to tackle the easy stuff—but we are determined that together we will ensure that we achieve the most difficult task of all: by 2030, we will have a secure, cleaner energy system. The prize at the end is worth all that effort, and there is no point being in government if we are not going to tackle some of the long-term, difficult challenges. I once again thank hon. Members for participating in this debate and encourage them to keep up the challenge to Government as we ensure that we realise every single opportunity available to us in this most important sector.
Clive Efford (in the Chair)
We have 27 minutes remaining, but this is not an invitation to make a 27-minute speech. The hon. Member for Truro and Falmouth (Jayne Kirkham) should take a few minutes to emphasise the key points that she wants to take away from the debate.
Electricity Grid Upgrades
Michael Shanks Excerpts(1 month ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
That was almost a year ago.
Andrew Bowie
Quite. Regardless of the technologies that are selected, of whether the pylons and associated infrastructure are built and of any right hon. or hon. Member’s view, communities out there want to know what the community benefits package and the trade-offs will be, and what they will receive as a result of having to host infrastructure in the national interest. An update on that would be delightful.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
It is a pleasure, Sir Christopher, to serve under your chairmanship. I thank the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) for introducing the debate, for his approach, and for the engagement we have had on the topic in the short time that I have been in this job. While I suspect we might disagree politically on a great many things, his repeated commitment to the need for net zero is important, and separates him from some hon. Members who might make the issue of grid updates part of an excuse to avoid dealing with the climate issue. I welcome that, and I was pleased to meet him and his colleagues recently to discuss the matter.
I also thank all others who have contributed to the debate. I welcome the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) to his new role. He is not just a shadow Energy Minister now, but shadow Secretary of State for Scotland. Clearly, he did not have enough on his plate before. I do not know what it says about the Scottish group of Conservative MPs that he has two jobs, but I will leave that to one side. The debate this morning has been wide-ranging, although I confess I did not anticipate an existential question from the right hon. Member for South Holland and The Deepings (Sir John Hayes) about the nature of beauty and the environment. I learned a lot from that, but I will leave the theological debate about pylons to others in the House.
I want to pick up on the general context first, and then some of the specific issues that have been raised. When it comes to the security of our energy future, few matters face us as a Government more important than the delivery of network infrastructure. It was the topic of the very first meeting I had as a Minister, and has been the topic of almost every other meeting I have had in this job, with a range of different people looking at it. Our network infrastructure is in dire need of upgrading.
I will start with the point that the shadow Minister finished on. I recognise that the impact of delivering these upgrades, while important to our national infrastructure, will be felt in individual communities; that is the nature of this. I recognise that there will be communities across Great Britain and Northern Ireland that will have to host energy infrastructure. We thank them for doing so and, while recognising the importance of upgrading infrastructure for the whole country, also recognise the need to get the balance right.
Jim Shannon
The Minister is always incredibly helpful with questions that I or anybody asks, which I appreciate and thank him for. For Northern Ireland to be successful, it needs support from Government here. The shadow Minister reiterated that. I ask the Minister to say something perhaps similar for the record, so that it is in Hansard. We in Northern Ireland need to be very much part of the strategy for the future. As others have said, it is the United Kingdom of Great Britain and Northern Ireland. We are always better together, but there are advantages—let us see some of those advantages.
Michael Shanks
While I thank the hon. Gentleman for his intervention, me repeating “better together” is sometimes tricky in my political party. I do, however, reiterate my commitment to the whole of the United Kingdom. He will know that I take that very seriously, and I have had a number of meetings on the topic with the Economy Minister in Northern Ireland, who is responsible for energy. Clearly, the role I have is different in Northern Ireland, given the transferred nature of energy policy and the whole island grid, but I take the issues very seriously and commit to that today.
The delivery of a reinforced modern electricity network is critical for every home and business across the country. It is a critical enabler for our Clean Power 2030 mission, which is designed to deliver not just energy security but economic growth, skilled jobs and cheaper energy, which the country so desperately needs. In short, transforming the network underpins our shared commitment to energy security, prosperity and the low-carbon future that the country needs. It is fair to say that this transformation is extremely long overdue. The last significant modernisation of the grid took place in the 1960s. New investment into industries of the future, such as data centres, will play such an important part in the economy of the next few decades. We need to deliver jobs around that, unlocking growth, but electricity demands will increase by an expected 60% by 2035 and double by 2050.
Deirdre Costigan
I want to bring the Minister’s attention to issues being faced in west London. He mentioned data centres; we recently had confirmation of a great investment from CyrusOne, but it has to get power from Enfield because there are huge constraints on the energy system in west London. Does the Minister agree that we need to ramp up the work on connecting these new investments to the grid? We must not allow the tactics of the Opposition, which are about delay and going back 14 years to decisions they should have made but never did. Now is the time to take action; people should not be required to pay higher energy fees than they should, which is another aspect of this issue.
Michael Shanks
I agree with my hon. Friend on that important point. Connection dates on both the generation and demand sides are much too far in the future. We need to build more of the network structure across the country and reform the way we deal with connections, which is ongoing.
I am conscious of time and want to give the hon. Member for Harwich and North Essex time to respond. We have heard from a number of hon. Members about the impact of grid expansions on their communities. I want to make three key points. First, I do not accept that grid expansion is riding roughshod over communities. Communities will have a say in these projects. Secondly, I take a less dismissive view than some hon. Members about the importance of genuine community benefits. If communities host infrastructure and generation, they should benefit. The shadow Minister referred to work under way, which he said the previous Government spent a year on and we have moved on in five months. We are moving quickly to work out what effective community benefit looks like. We are developing guidance on that, particularly for hosting transmission network infrastructure, which will be published in due course.
On the point about modern technology, delivery of the network is underpinned by the latest technology, tailoring it to locations that urgently need reinforcement. It relies on upgrading existing power lines first, and uses innovative strategic design and options to find solutions that balance ecological impacts and, crucially, cost. That is important, given that the cost is borne by billpayers across the country.
Hon. Members will be under no illusion that we have to expand the network considerably, rewiring and connecting to new areas of demand in future. That is why we have outlined our mission of clean power by 2030. We will publish our response to NESO’s report soon. The mission will be achieved by investment in renewable generation, including onshore and offshore wind, solar and storage. There can be no transition to that clean power future without the grid upgrade. That work will take us to 2030 but, given the increase in demand to 2050, it will have to continue far beyond that.
I want to pick up a point about NESO’s advice on cost. NESO’s advice on the project in East Anglia concerns whether it will be cheaper or more expensive. A number of hon. Members should review that advice more carefully. I would have gone into more detail but I have only 40 seconds to wrap up. It is worth clarifying that delays in delivering the undergrounding part were not factored into some of the points that the hon. Member for Harwich and North Essex made.
To conclude a wide-ranging debate, we are on the edge of an industrial and energy revolution. We want to reduce bills and deliver energy security. To do that we need to upgrade the grid infrastructure, which must be hosted in some communities. We want to bring them with us but that work has to be done, and that is the commitment of this Government.
Oral Answers to Questions
Michael Shanks Excerpts(1 month, 2 weeks ago)
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Joe Morris (Hexham) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
In just four short months, we have made rapid progress on achieving our mission for clean power by 2030. We have set up Great British Energy and announced its headquarters in Aberdeen, secured a record-breaking 131 renewables projects, and consented to record amounts of solar. We are getting on with delivering lower bills, energy security, good jobs and climate action.
Catherine Atkinson (Derby North) (Lab)
Rolls-Royce in Derby is an international leader in research on and the development of small modular reactors, and it is fantastic that the Government have acknowledged the role that SMRs will play in clean power generation, energy security and green jobs. In the Budget, we heard that the final decision on Great British Nuclear’s SMR competition will conclude next spring. Does the Minister agree that it is important for this opportunity to be seized as soon as possible?
Michael Shanks
I agree with my hon. Friend that nuclear will play a central role in our clean power mission, and will continue to be a critical part of our energy mix as we progress towards 2030 and far beyond. Great British Nuclear is continuing to drive forward the competition on small modular reactors, with bids currently being evaluated by the Department, and I look forward to having more to say about this in due course.
Bill Esterson
The last Government held a consultation on electricity market arrangements, but despite having said that that was their flagship policy in this area, they did not publish the results of that consultation. Does my hon. Friend agree that electricity and, indeed, energy market reform is crucial to achieving the Government’s stated 2030 clean energy targets and to reducing bills, and can he say whether this Government will publish the results of the last Government’s consultation and if so, when?
Michael Shanks
I congratulate my hon. Friend again on his appointment as Chair of the Select Committee—he brings a huge amount of knowledge and experience to the role—and I agree with him about the importance of reviewing electricity market arrangements. We are building on the last Government’s consultation, and we will have more to say in the months ahead. This is a crucial element of how we achieve clean power by 2030 and ensure that our energy system of the future is fit for what will be a different way of managing energy throughout the country. We will have more to say about that in the months ahead.
Baggy Shanker
Last week a report published by the National Energy System Operator noted that although the programme to roll out new small modular reactors was being developed for the mid-2030s, a 2030 roll-out date would in fact be possible. Given that SMR technologies hold exciting and significant potential for investment in jobs and infrastructure in constituencies such as mine, has the Minister considered the value of bringing the roll-out forward to 2030?
Michael Shanks
My hon. Friend is right to say that nuclear will play a vital role, and that it not only delivers on our energy security but creates good, well-paid jobs. Unlike the last Government, who in 14 years did not deliver a single nuclear project—there were many consultations and processes, but not a single nuclear power station was built—this Government are getting on with delivering a nuclear future.
Joe Morris
Last week’s report from the National Energy System Operator showed that not only is clean power by 2030 achievable, but it can lead to lower bills and more secure systems. Does the Minister agree that the only way to protect bill payers permanently is to go as far and as fast as possible towards our clean power mission by 2030?
Michael Shanks
My hon. Friend is absolutely right. The report published by the independent National Energy System Operator laid out not only that reaching our clean power mission is entirely achievable, but that it will bring down bills. The importance of the report is that it set the course for how that is possible. The reality, which the Conservative party refuses to accept, is that the only way to get us off the rollercoaster of high bills is to deliver at pace the clean energy that we know will deliver energy security and climate leadership, and bring down bills for people right across the country.
Tom Tugendhat (Tonbridge) (Con)
I am delighted that the Minister is setting out that the report promises an extra £40 billion of investment a year in the energy sector and, presumably, the taxes to go with it, which will of course come from the businesses that are paying for everything else in the Budget that has just gone by. Is there anything at all in his proposals that will actually bring down the cost of energy and not be replaced by taxpayer funding? It appears at the moment that there is nothing, and energy prices are already going up.
Michael Shanks
I would encourage the right hon. Gentleman to read the NESO report, because it sets out in great detail not only that clean power is achievable by 2030, but that it will lead to lower bills. What he says about investment misses the point: in the last few weeks, we have announced billions of pounds of private sector investment in these projects; indeed, Scottish Power has announced today that it will provide £1 billion. Companies are choosing to invest in this country, whereas they did not under the Conservative party. The reality is that once upon a time, the Conservatives recognised that the drive to net zero was important. They have abandoned that commitment now.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I thank the Minister for agreeing to meet the OffSET—offshore electricity grid taskforce—group of MPs later today; we are very much looking forward to the meeting. Does he recognise that achieving the 2030 deadline set out in the NESO report requires an acceleration of the process, which, in turn, is dependent on much higher levels of public consent?
Michael Shanks
I recognise the hon. Gentleman’s point, and I am looking forward to meeting him and his colleagues this afternoon to discuss the particular issues in his area. We need to build more network infrastructure across the UK to make this endeavour a reality, but he is right: we want to bring communities with us on this journey. That is why we have said that we are looking again at what community benefits will look like, building on some of the work that the previous Government did in consulting on this issue. Crucially, however, if want to bring down bills and deliver energy security, we will have to build the infrastructure, and that is what this Government are committed to doing.
Wera Hobhouse (Bath) (LD)
The Minister knows well the Liberal Democrats’ commitment to community energy. Will the Government establish a clean community energy scheme, look at the barriers that currently face community energy projects and look at supporting the National Grid to deliver community energy?
Michael Shanks
The hon. Lady and I have had a number of conversations, and I recognise her commitment on this issue. We have committed in the local power plan to delivering investment in community energy across the country. Importantly, we want not only to invest in schemes, but to deliver across Government the mechanisms needed to make it more possible for communities to deliver such schemes. That will build capacity in communities so that we can see more community energy.
Sir Desmond Swayne (New Forest West) (Con)
What is the beef behind the Government’s reluctance to embrace with enthusiasm locally generated community energy? Why did they vote against the amendment tabled to the Great British Energy Bill by the hon. Member for Bath (Wera Hobhouse)?
Michael Shanks
I think the right hon. Gentleman thinks that was a “gotcha” question, but, of course, the Conservative party did not vote for the Bill at all. Amendment or not, I do not think he can really speak about what Great British Energy might deliver, because, despite it being one of the most popular policies at the last election, the Conservatives failed to bother to vote for it.
Claire Coutinho (East Surrey) (Con)
Last week, the National Energy System Operator published a full systems cost analysis of the Secretary of State’s flagship project to carbonise the grid by 2030. This morning, the Secretary of State said on several media outlets that the report shows that his plans will lower bills. I remind the House that the report assumes that gas prices are 40% higher than the Department’s own estimates, that the price of carbon price is at least double what it is now, that the Government can commission more offshore wind in the next two years than in the last six combined without moving prices, and that they can build the grid at a pace we have never seen before in this country, without any delays. Even if all that is achieved, page 78 of the report shows that the cost of the system will be higher. For clarity, would the Minister like to repeat at the Dispatch Box the Secretary of State’s claim that the NESO report shows that Labour’s system will lead to a lower cost of electricity?
Michael Shanks
What the shadow Secretary of State has just outlined quite coherently is that the Conservatives have no ambition in this space whatsoever, but we do. I am very happy for the right hon. Lady to outline where our ambition is. We will build faster than the previous Government, although I have to say that that would not be difficult. The shadow Minister sitting next to her, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), said quite clearly at their conference that the previous Government had built infrastructure far too slowly, and their former Energy Minister, the right hon. Member for Beverley and Holderness (Graham Stuart), said that their onshore wind ban was “always mad”. We are quite happy to pick up where they left off and deliver the clean power that this country needs.
Claire Coutinho
This is the ministerial team who told the electorate they were going to cut their bills by £300, without doing any homework to find out how those plans would work. They voted against our amendment to hold them to account on their own pledge just two weeks ago, and now they are trying to claim that the NESO report shows that their approach will lower bills when in fact it shows in black and white that the system will be much more expensive. Does the Minister not see that if they follow this plan, we will be a warning, not an example, to the rest of the world and that the British people will be colder and poorer as a result?
Michael Shanks
Time and again, the Conservatives run away from their record on this in office. The reason why people right across this country are paying more on their energy bills is that the Conservatives did not get us off the rollercoaster of fossil fuel markets, but we are now moving at pace. The right hon. Lady may want to keep us in the vulnerable state where we are reliant on international gas markets, but we are determined that we will not do that. We will bring down bills and deliver energy security. I am not ashamed to say that we will move with great ambition to deliver what this country needs and to deliver the good jobs that go with it.
Douglas McAllister (West Dunbartonshire) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
We are moving at pace to set up Great British Energy. So far we have appointed the start-up chair, Jürgen Maier, we have announced that the headquarters will be in Aberdeen and we have progressed the Bill through the House of Commons. This builds on the first partnership announced for Great British Energy, with the Crown Estate, and on a recent new deal to collaborate with Scottish public bodies. We are getting on with the job of delivering 21st-century public ownership for the British people.
Douglas McAllister
Every family and every business in my constituency paid the price of 14 years of Conservative failure with rocketing energy bills because the last Government failed to invest in clean energy. The Opposition continue to oppose Great British Energy. Does the Minister recognise the absurdity of their argument that they are quite happy with foreign public ownership as long as it is not UK citizens who own our energy?
Michael Shanks
My hon. Friend makes a good point. It is important to remember that, despite what the Conservatives might have us believe, Great British Energy is overwhelmingly popular with the British people. That includes the people in Scotland, because of course it was not just the Conservative party who did not vote for Great British Energy; surprisingly, the Scottish National party also failed to vote for a publicly owned champion in our energy space. We are getting on with delivering jobs and growth, delivered with public ownership through Great British Energy.
Neil O’Brien (Harborough, Oadby and Wigston) (Con)
Before the election, Labour said that Great British Energy would cut electricity bills by £300. After the election, the Labour Government voted against writing that into law and instead took away people’s winter fuel payments and made their bills more expensive. The Institute for Fiscal Studies has now said that their policies are fundamentally raising prices for consumers to the tune of £120 per household, and we know from the NESO report that this will get worse. Even if they triple the pace of wind roll-out, double the pace of grid connection and make other heroic assumptions, all of this is going to bump up costs further, is it not? We are doing this from the basis of having the high electricity prices in Europe. What assessment has the Minister made of the impact on British industry?
Michael Shanks
Question after question from the Conservatives shows that they do not recognise the part they played for 14 years in why we are paying higher bills than ever before. We are the only party with an ambitious plan to get us off the volatile fossil fuel markets. The Conservatives used to believe that, in our drive to net zero, we should build this infrastructure for the long term. They are now opposing it, but they will have to tell their constituents why they want to leave them exposed to rising bills.
Jo White (Bassetlaw) (Lab)
Dr Andrew Murrison (South West Wiltshire) (Con)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The Government regularly meet stakeholders to discuss the development of our energy infrastructure. Last week, the Government received advice from the National Energy System Operator outlining its advice on the pathway towards clean power by 2030. Later this year we will publish our 2030 action plan, which will set out details on the future of our energy mix.
Dr Murrison
Offshore wind has been a real positive for our energy security and grid independence, but unfortunately not when the wind does not blow. Given the election of a President who tells us he is going to “drill, baby, drill,” what revision does the Minister anticipate to his timetable towards net zero?
Michael Shanks
As I said in my previous answer, later this year we will outline our action plan on how we will deliver on the 2030 target; there is no change to our timetable in that regard. The right hon. Gentleman raises a good point about what happens when the wind does not blow and the sun does not shine, and about ensuring we have a mix in our energy system. That is why we remain supportive of nuclear and why we have recently announced investment in long-duration energy storage, to ensure we can capture energy and use it when we need it.
Jenny Riddell-Carpenter (Suffolk Coastal) (Lab)
I was delighted by Ofgem’s announcement this morning that it now recommends that the proposed Nautilus interconnector should be located at the Isle of Grain, not on the Suffolk coast. Since I have been elected, I have made firm representations to the Minister and Ofgem, including via its consultation, that the Suffolk coast should not have been considered and brownfield sites should have been considered first. Will the Minister meet me to discuss other National Grid projects in my constituency?
Michael Shanks
Ofgem has announced today decisions on a number of interconnectors. Those are decisions for Ofgem and not for the Government. We have recently announced the launch of a strategic spatial energy plan, to ensure that we plan such projects holistically, across the whole of the United Kingdom, and take into account a number of schemes when planning future energy, such as those my hon. Friend mentions in her constituency. I will continue to have discussions about that with Members from across the country.
Nick Timothy (West Suffolk) (Con)
China’s largest offshore floating wind turbine company, Ming Yang Smart Energy, plans to build its first manufacturing plant outside China in Scotland. Ming Yang benefits from huge subsidies in China, but there are serious questions about energy security and national security. The Secretary of State says he wants to end reliance on foreign autocrats, but when he was asked about this on the radio this morning, he had no answer. Will the Minister rule out allowing any turbines that might be controlled by hostile states?
Michael Shanks
We are encouraging investment in the UK to build the infrastructure that we need in the future. Just today, we have announced the clean industry bonus that will give as much support as possible to companies to build their supply chains here in this country. We will continue to look at supply chains and, of course, we take seriously the companies, across the range of business projects, that are investing in this country. There is a series of processes already under way across Government. Whenever anybody wants to invest in this country, those processes will be followed in the usual manner.
Ms Polly Billington (East Thanet) (Lab)
Mr Speaker, will you and the Minister give the House an opportunity to celebrate the £1 billion of investment announced today in offshore wind in this country? It will provide jobs across the country, as promised by this Government, which the British people are not used to after the past 14 years. Will the Minister meet me to discuss the infrastructure required to connect that clean, secure energy to our homes, in particular the Sea Link project that could have an impact in my constituency?
Michael Shanks
My hon. Friend is right to highlight the fantastic announcement today by ScottishPower of £1 billion of investment here in the UK, building the infrastructure that we need, and delivering jobs and skills in this country as well. It is one of a number of announcements that we expect, because we are not agnostic in this Government on delivering the industrial strategy that we need. My hon. Friend the Minister for Industry is working on that at the moment. We will deliver the jobs in this country to build the clean power of the future. We will deliver good, well-paid jobs and the energy security we need.
Andrew Pakes (Peterborough) (Lab)
Joani Reid (East Kilbride and Strathaven) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The energy transition presents an incredible opportunity for job creation right across the UK, particularly in our industrial and coastal communities. Through Great British Energy, we will build on Scotland’s reputation as a world leader in energy and secure long-term, well-paid jobs in the industries of the future.
Joani Reid
I recently had the privilege of opening an extension to the Kype Muir wind farm in my constituency. The extension alone will generate enough power for 53,000 homes for 30 years. My constituency is also home to part of Whitelee, the largest onshore wind farm in Europe. However, not one of those turbines was manufactured in the UK, let alone locally. What steps is the Minister taking to develop UK manufacturing capacity in that area?
Michael Shanks
I know well my hon. Friend’s constituency—it is next door to mine—and both wind farms she mentions. She says quite rightly that, for all the expansion in those technologies over recent years, very few of those jobs, particularly in manufacturing, have been in this country. We will do everything we can, through Great British Energy and the clean industry bonus we have announced today, to grow our domestic supply chains, build industry in this country and win jobs for Britain.
Harriet Cross (Gordon and Buchan) (Con)
Last week, just days after the Budget, Apache announced that it would exit the North sea by 2029. It said:
“The onerous financial impact of the energy profits levy…makes production…beyond 2029 uneconomic.”
What assessment have the Government made of the impact of those policies on current jobs in north-east Scotland, and how will Great British Energy compensate for the loss of those jobs?
Michael Shanks
We are working with industry in the north-east of Scotland to ensure that this is a just and prosperous transition. We have announced our next steps of responding to court judgments, and a consultation is open at the moment. We will have more to say about that in the months ahead. The hon. Lady must recognise that if she wants to see investment from Great British Energy, she might actually have to support its creation in the first place. The Conservatives cannot have it both ways; either they want a public energy company to invest in the jobs of the future—
Michael Shanks
Or they do not, as her right hon. Friend has just confirmed from the Back Benches. She cannot have it both ways.
Christine Jardine (Edinburgh West) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
My hon. Friend is right; there are good projects right across the country that we hope to invest in in the lead-up to delivering in 2030. The NESO report clearly set out that our aim is achievable. The Conservative party wants to continue having the arguments of the past; we are determined, with ambition, to deliver on the arguments of the future.
Lee Anderson (Ashfield) (Reform)
Michael Shanks
It perhaps will not surprise the hon. Gentleman or the House that I am not going to agree with his final point. Net zero is incredibly important to deliver climate leadership, lower bills and the jobs of the future. But on biomass, we rightly expect full compliance with all regulatory obligations on biomass, and consumers rightly recognise the high standard of accountability from generators.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
Gareth Davies (Grantham and Bourne) (Con)
Conservative Members will never stop holding the Government to account for their pre-election promise to cut energy bills by £300. Have civil service officials conducted any modelling whatsoever that can legitimise that figure?
Michael Shanks
We arrived at the figure through independent analysis. We stand by the reality that the only way to bring down bills is to commit to our 2030 target. The National Energy System Operator backs that, but the Conservative party fails to support that action. The hon. Member therefore must explain what the Conservative plan is for reducing bills for people who are paying more than they have ever paid.
Tim Roca (Macclesfield) (Lab)
My constituents understand that tackling the climate crisis and getting lower bills go hand in hand, and they are excited about Great British Energy. Will GBE invest in community energy projects in places such as Macclesfield?
Michael Shanks
My hon. Friend is right to make a point about community energy. The local power plan that we are committed to will deliver community energy projects throughout Great Britain. I am sure that Macclesfield has some fantastic projects that Great British Energy will look at. We want to unleash the potential of community energy across the country.
Greg Smith (Mid Buckinghamshire) (Con)
National Grid’s rationale for rebuilding East Claydon substation is based on speculative applications, not consented real schemes. Will the Minister therefore meet me to find a way to get National Grid more grounded in reality rather than speculation?
Michael Shanks
I am happy to look at specific cases, but the Secretary of State’s role as final decision maker on some planning applications means that I cannot comment on them. However, generally speaking, the hon. Member makes an important point about looking at how we plan projects holistically throughout the country. That is why we have announced the first ever spatial energy plan for the whole of Great Britain.
Richard Burgon (Leeds East) (Ind)
The devastating scenes of flooding in Spain remind us all of why urgent investment is needed to deal with the deadly consequences of climate change. Does the Minister agree that that investment should be paid for by the polluting companies that have caused the climate crisis?
Alison Bennett (Mid Sussex) (LD)
Bolney in Twineham parish in my constituency hosts the Rampion windfarm substation, which leads to several battery energy storage solution applications. What reassurance can the Minister give my constituents about the adequacy of the regulatory framework?
Michael Shanks
Batteries will play an important role in our energy mix in the short duration storage that we need. We will continue to look at whether the regulatory arrangements are sufficient. Obviously, we want all the applications to be for safe projects. The regulations are in place to ensure that. If we need to do any more work, we will happily look at that.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
We had a very successful all-party group meeting last week on floating offshore wind in the Celtic sea. I know the Minister is supportive and ask him to consider mechanisms such as ringfencing contracts for difference and investment in ports to kickstart the investment in the Celtic sea.
Michael Shanks
My hon. Friend is right to raise the important potential of the Celtic sea in our green energy transition. I will be in Wales tomorrow to speak at a green energy conference on exactly that question. There is huge potential in floating offshore wind. We want to bring the manufacturing jobs in the supply chain to this country as well, which is why we launched today our clean industry bonus to bring that investment here to build the factories of the future and deliver the good, clean jobs of the future.
Alicia Kearns (Rutland and Stamford) (Con)
The wind industry has rightly agreed a standard compensation package for rural communities with big wind plants. The solar industry, however, is, unsurprisingly, busy whitewashing Uyghur slave labour in its supply chains rather than doing that. If it will not act, will the Government step forward and recognise that they must support rural communities by creating a standardised compensation programme?
Michael Shanks
The hon. Lady has pursued this and several other issues to do with the solar industry for a long time. We are currently looking at all the options, particularly around community benefits, to ensure that they are at a scale—following on from the previous Government’s consultation on whether they should be compulsory—that genuinely benefits communities.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
My constituent Konnie Huq, with Arts Council and Lottery funding, has compiled a kids’ climate guide, with Jamie Oliver among the contributors. Will Ministers join forces with her to get it out there, preferably to every school in the country, because we have got to start young?
Patrick Spencer (Central Suffolk and North Ipswich) (Con)
I met with National Grid yesterday and communicated my concerns about the Norwich to Tilbury line but we remained constructive and talked about community benefit schemes. Unfortunately, it told me that the Government were dragging their feet on defining community benefit schemes. Can the Minister update the House on when they will bring forward guidance, and can he promise that a community benefit scheme is a real, positive economic benefit for my residents who are impacted by the pylons?
Michael Shanks
Clearly I cannot speak for National Grid but I can speak for this Government and in four months we have moved as quickly as possible on what a community benefit scheme will look like for network infrastructure as well as for generation projects. The Conservative party had 14 years to put in place a different scheme and did not; in four months we are moving as quickly as we can.
Perran Moon (Camborne and Redruth) (Lab)
As Ministers know, the European powerhouse of critical minerals is Cornwall, including its vast quantities of lithium, essential for our transition away from fossil fuels. Will the Ministers agree with the industry’s call for a target of 50,000 tonnes of lithium?
Chris Law (Dundee Central) (SNP)
Ahead of the general election the Labour party was warned that its plans for the North sea in Scotland would lead to up to 100,000 Scottish job losses. Last week this became a reality when the US oil firm Apache said that it would end all its operations in the North sea by the end of 2029, citing this UK Government’s Budget and tax regime. Can the Minister explain why this UK Government sees the jobs and livelihoods of oil and gas workers in the north-east of Scotland as expendable?
Michael Shanks
I do not believe that at all. This Government are committed to a just and prosperous transition. The reality is that 100,000 jobs have been lost in the oil and gas industry in the past 10 years. If we do not recognise that there is a transition under way and put in place the measures to produce the jobs of the future, we will have more losses. The party that the hon. Member represents could have done something about that by supporting Great British Energy headquarters in Aberdeen but he failed to show up and vote for it.
Noah Law (St Austell and Newquay) (Lab)
I declare an interest as a chair of the all-party parliamentary group for critical minerals. Domestic supplies of copper and, of course, Cornish tin are critical to the UK’s energy security. What consideration has the Minister given to ensuring that copper and tin are recognised as critical minerals?
Energy Infrastructure Planning
Michael Shanks Excerpts(1 month, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The Minister for Energy Security and Net Zero, my noble Friend Lord Hunt of Kings Heath OBE, has today made the following statement:
This statement concerns an application for development consent made under the Planning Act 2008 by West Burton Solar Project Ltd for the construction, operation, maintenance and decommissioning of a solar photovoltaic array electricity generating station situated in Lincolnshire.
Under section 107(1) of the Planning Act 2008, the Secretary of State (Ed Miliband) must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it.
The current statutory deadline for the decision on the West Burton Solar Project application is 8 November 2024.
I have decided to allow a short extension and to set a new deadline of 24 January 2025 to allow time for necessary public consultation on potential variations to the application.
The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.
[HCWS195]
Fuel Poverty
Michael Shanks Excerpts(1 month, 3 weeks ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I thank all right hon. and hon. Members for participating in the debate. I particularly thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing the debate and for his commitment on this issue in debates over many years. I know that it is a considerable issue in his constituency, where I think 31% of households are in fuel poverty, and he is right to raise it in this House. I always appreciate conversations with him, including our recent conversations on many of the topics that have been raised today.
I agree on the importance of this debate on tackling fuel poverty, although I should say at the outset that fuel poverty is devolved across the UK. Certain things that I will speak about relate to the UK Government’s responsibility for fuel poverty, which focuses on England. In the Budget last week, a considerable amount was assigned to the devolved Administrations, including one of the biggest devolved settlements for the Scottish Government in many years. I am sure that the right hon. Gentleman will raise these issues with colleagues in the Scottish Parliament to get much-needed funding to projects in Scotland as well.
On devolution, it is also important to say that we measure fuel poverty in very different ways across the country, with different metrics and targets for how we identify it. In Scotland, the metric for fuel poverty is the same as that used in England to measure energy affordability. It includes deeming a household fuel-poor if it has to spend a certain proportion of its income after housing costs on energy, which is a slightly different figure from the one used in Scotland.
Nevertheless, much of what we have heard today is true across all parts of the UK. Many hon. Members made the point that the choice between heating their home and feeding their family or paying other bills is a stark one for any family. In a country as wealthy as ours, that should not be a choice that families have to make.
I welcome the point made by the shadow Minister and others that we can all work together to move forward on the issue. However, we need to take more action than has been taken in the past 14 years. That is why our manifesto committed to slashing fuel poverty and delivering our warm homes plan. We have already taken the first steps in delivering that. In the Budget last week, the Chancellor committed £1.8 billion to support fuel poverty schemes, helping over 225,000 households to reduce their energy bills by over £200. We have announced that we will consult this year on increasing the minimum energy standards in the domestic private rented sector: 35% of all those in fuel poverty in England are in the private rented sector, so it is vital that we provide as much support as we can.
I will pick up on several points raised during the debate, but the critical point was about trying to bring all the different policies together into a cohesive fuel poverty strategy. That is indeed what the Government have committed to publishing in due course, to ensure not only that we have a clear focus on tackling fuel poverty but that the whole Government are aligned on delivery. That is the approach that the new Government have taken on a range of issues; in my Department that includes clean power by 2030. We making sure that all Ministers, wherever they are—in whichever Department and with whichever responsibility—come together to make the situation better.
I want to provide a little bit of context. I repeat that much of fuel poverty policy is devolved. In 2023, an estimated 13% of households—just over 3 million—were in fuel poverty in England, under the metric that is used here. That remains effectively unchanged since 2022. The Committee on Fuel Poverty, which advises on the effectiveness of policies and scrutinises them in England, stated that progress towards tackling fuel poverty has effectively stalled. In England, the target is to ensure that as many fuel-poor homes as possible achieve the minimum energy efficiency rating of band C by 2030, but 46% of all low-income households in England were still living in a property with a fuel poverty efficiency rating of band D or lower. That shows the sheer amount of work we have to do on the issue.
We are therefore working on a number of policies. In reflecting on the point made by the hon. Member for Mid Dorset and North Poole (Vikki Slade), I accept that there is an urgency to moving forward on all these issues. We have inherited quite a lot of issues that require urgent action. I ask for just a little patience, but I absolutely recognise the point that for someone living in fuel poverty, the impending winter is a crisis. The Government are therefore moving as quickly as possible on the issue.
The warm homes plan, which we announced in our manifesto and on which we are moving forward, is about transforming homes right across the country by making them cheaper and making energy clean to run, rolling out upgrades from new insulation to solar and heat pumps. We will partner with local and combined authorities, and the devolved Governments where possible, to roll out the plan. That was in the Budget speech last week, in which an initial £3.4 billion was announced towards heat decarbonisation and household energy efficiency over the next three years. That includes £1.8 billion to support fuel poverty schemes, which, as I said, will help more than 225,000 homes.
The right hon. Member for Orkney and Shetland raised several points. He rightly notes that the radio teleswitch service situation will be a worry to many people, particularly in rural communities. As he said, a roundtable was held, which was important and brought together the key stakeholders. Ofgem has updated its action plan to make sure that we are pushing forward and in particular that we are putting pressure on the energy companies responsible for delivery, to make sure that the upgrades are made and that targets are in place, including some key milestones that they must meet early next year.
Several hon. Members mentioned community benefits. This is a debate that we have had in this Chamber and across the House before. It is extremely important that if communities are hosting energy infrastructure such as the Viking wind farm in the right hon. Gentleman’s constituency, which I visited not long ago, there should be some benefit. We certainly do not want the communities that host vital energy infrastructure to be those that are most likely to be in fuel poverty. We are therefore doing a lot of work, building on the previous Government’s consultations, on what community benefits might look like. We want to make sure that communities and individuals get a genuine benefit, because some community benefits do not currently deliver quite the change that we would like.
Mr MacDonald
Will the Minister allow humble servants such as myself to get involved in that? I have spent several years working with the Highland council and others on community benefits, and I would appreciate a meeting.
Michael Shanks
I am always willing to take help from any Member. If the hon. Gentleman can take some of this work off my plate, I will be very happy to work with him. Of course, we will first have to work out the answer to the question of where God comes from, but if we can settle on the fact that it is self-evidently Rutherglen in the central belt, I will be happy to work with the hon. Gentleman. That spoils the joke I was going to make about his comparison of temperatures, which is that seeing him wear a very woolly jumper this morning in London made me wonder what he wears in Skye, but that is for another debate.
Genuinely, though, we want to have an open and collaborative approach, and we want to make this work. The consultation that the previous Government carried out and the feedback we have from a number of partners show that there are really good examples of community benefits working well, along with a lot of examples where they are not working well. If we could build on that approach together, I would very much appreciate it.
While we are discussing the hon. Gentleman, he made a very good point about remembering the different types of fuel that households use, and the real issue for off-grid homes—particularly in the north of Scotland, but right across the UK. Again, fuel poverty is devolved, so some of those questions are for the Scottish Government to answer—I know that the questions will be put to them—but we are aware that in England, for which the Department for Energy Security and Net Zero is responsible, 12% of rural households are in fuel poverty, and those are the ones with the largest fuel poverty gap. Tackling those particular challenges in the rural context is therefore really important.
Jim Shannon
I am very much listening to the Minister, who was perhaps about to tell us what will happen in Northern Ireland, where 62% of households are dependent on oil. In comparison, the proportion for England—I say this gracefully, Sir Roger—is only 4%. The greater emphasis on Northern Ireland will therefore fall upon us. The Minister says that this is a devolved matter and that money has been set aside by Labour to help, but the differential is massive and cannot be ignored.
Michael Shanks
The hon. Gentleman, as always, makes a very good point, although I noticed that he called the shadow Minister his friend but not me. But, over time, I think we will build on that and—
Michael Shanks
I aspire to that—quite. The hon. Member for Strangford (Jim Shannon) made a number of important points, and I have to confess that I was not aware of the statistic that he cited. That puts the difference into stark contrast, so I absolutely take the point.
The hon. Gentleman spoke earlier about engaging with the Northern Irish Executive. I have met both Ministers with responsibility for different parts of the energy policy—most recently, in fact, in the inter-ministerial working group across all the devolved nations. One of the key topics that we discussed was decarbonisation, particularly of such households, so we absolutely are taking that issue forward.
I am conscious of time, Sir Roger, so I will just pick up on a couple of other points that hon. Members raised. The hon. Member for Wokingham (Clive Jones) tempted me to be drawn into Beveridge’s “five giants”. Actually, I think that is an important statement about where this Government have come in, because it feels to me like want, disease, ignorance, squalor and idleness are yet again the five giants that we have to tackle as a country, and we are tackling them all as quickly as we can. I take his point, but it brings into stark contrast the fact that we have come in with some really tough decisions to make. There are pressing needs in the NHS, the education system, housing and energy, and we are doing what we can to improve all those. The Budget last week was about fixing the foundations and investing in our public services again. We can undoubtedly do more, but we are moving forward as quickly as we can.
I want to touch on consumer protection, which a number of Members have raised, and the point of the regulator. The ministerial team in the Department have had a number of meetings with Ofgem over a variety of issues, but there is no doubt—Ofgem shares this view—that suppliers could do much more to protect customers and provide them with a better quality of service. We are therefore looking at how we strengthen the regulator—a consultation is under way—so that it can hold companies to account for wrongdoing, require higher performance standards and ensure that there are much better levels of compensation when providers fail.
Last year, Ofgem introduced much more stringent rules around the involuntary installation of prepayment meters, an issue that I raised in one of my first questions after I was elected to Parliament. That was a shocking situation, but much more stringent requirements are now in place. We continue to monitor the situation to see whether much more is required.
I thank all hon. Members who have participated in the debate. There is agreement across all parties that this issue is extremely important. Progress has stalled in recent years, and we now need to make significant advances. The Government are committed to slashing fuel poverty. We will do that through the fuel poverty strategy for England, and also, we will look across the whole of the UK at what we can do with our energy system to reduce bills and provide more secure energy for everyone, and to improve home standards. We will do that by protecting low-income and vulnerable consumers and by trying to raise households out of poverty across the board. Our strategy on child poverty, the raising of the minimum wage and other factors combine to support households struggling in fuel poverty.
We will no doubt return to this topic again. We do not pretend to have all the answers, so we are open to any ideas from hon. Members right across the House. Together, we can tackle this issue, but it needs concerted effort and investment, and this Government have started that.
Energy Rebates: Highlands and Islands
Michael Shanks Excerpts(1 month, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I thank the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) for securing this incredibly important debate. He has the pleasure of representing one of the most beautiful parts of Scotland, to which I enjoy going on holiday often. It is great to be discussing this long-standing issue for the highlands and islands of Scotland, which, as he mentioned, was also raised by former Members.
The context of this discussion is important. Energy bills are too high for too many people right across the country, not just in the highlands and islands. This Government have made it clear from the outset that we want to put in place an energy system that delivers lower bills permanently; removes the price spikes that all our constituents, including those in the highlands and islands, have faced over the past few years; and speeds up the transition to home-grown clean energy.
The hon. Gentleman made the point, as have others, that the north of Scotland plays an important role in delivering clean energy at the moment. That brings us back to a conversation that we have had in this place a number of times—indeed, in the previous debate, I recruited the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) to help me with it—on community benefits. We need to do much more for the communities that host this nationally important energy infrastructure and the network infrastructure that goes with it to get power across the country. They should feel benefits from that in their bills and their local communities, and we are looking at that.
The creation of Great British Energy, the first publicly owned energy company in this country for 70 years, is about harnessing clean energy and investing in communities, and of course it will be headquartered in Scotland. I know that the hon. Member for Moray West, Nairn and Strathspey and his SNP colleagues did not support the Great British Energy Bill, but I hope that in time they will see the benefit of Great British Energy delivering a greater quantity of cheaper energy right across the UK, which will bring down bills for everyone, wherever they are.
The hon. Gentleman made an important point about locational pricing. If we were to design an energy system from scratch, we would not design the system we have at the moment, which is the legacy of electricity infrastructure being built in different places, at different times and in different ways across this country for a century. Our ambition is to deliver a lower-cost, renewables-based energy system, so we are considering what reforms to the energy market will look like to enable electricity prices to better reflect local conditions. That could have a significant impact on communities like the one the hon. Gentleman represents, recognising that there should be some relationship between where energy is generated and the price people pay for it.
There are potential reforms on the table. The previous Government started the consultation and we have picked it up. Many hon. Members will be aware of the options. They include the possibility of zonal pricing, but it is important that we balance such options with potential capital investment impacts, so there is detailed work going on before we reach any decisions. Reform of the electricity market does not have to be defined simply by locational pricing; we will look at a number of other reforms to the national pricing model, and we continue to work closely with the regulator, Ofgem, and the new publicly owned National Energy System Operator to look at how they might work.
The hon. Gentleman’s point about transmission and distribution costs comes up in debates inside and outside this place. It is important to recognise the difference between the two. Electricity network charges are paid for connecting to, and using, the electricity network. They are paid by consumers across the country, both industrial and domestic, through the standing charge on their energy bill. Transmission charges are based on the costs that users impose on transmission by connecting in different locations, which means that there are higher charges for those areas that require energy to be transmitted a long distance. However, as we have discussed, transmission costs are generally lower in the highlands and islands than in other parts of Great Britain because Scotland is a net exporter of energy.
As the hon. Gentleman pointed out, the difficulty comes with the distribution cost, which is the cost of supplying households in each area with electricity. It is based on the complexities of how we get electricity to individual households, so places like the highlands and islands face higher distribution costs, for obvious reasons: the mountainous terrain, sparse population, distance between houses and poor weather conditions all contribute to those costs being some of the highest in the UK.
Graham Leadbitter
On the point about transmission charges versus distribution charges, transmission is, in effect, distribution to the rest of the UK. Energy is transmitted for people to purchase at the other end. It does not cost any less to do that—in fact, it costs more. Purchasing energy hundreds of miles away from where it is created, but paying less to receive it, seems completely inequitable.
Michael Shanks
I think that would be true if transmission charges were higher in Scotland than in other parts of the UK, but that is not the case. Distribution charges might be lower in certain parts of the rest of the UK, but the transmission charges are higher, taking into account exactly that point.
We would like to get the grid into a place where we have much more generation capacity being built next to population centres, as well as the investment in the highlands and islands and the North and Celtic seas, but there is no doubt that the grid we will need to build in the future will be very different from the one where we built a gas or coal power station next to a city. We do have to wrestle with these questions of how we get power to the right place.
We also have to take into account how to build in capacity for when renewables are not generating. Parts of Scotland may well generate more electricity than they can use, but not always—not 24/7, 365 days of the year—so the whole grid has to be part of the answer. As the hon. Member referred to, one solution is the hydro benefit replacement scheme. It provides annual assistance of about £112 million to reduce distribution costs for domestic and non-domestic customers in the region, which works out at around a £60 annual reduction in household bills.
Many hon. Members have raised the really important point of standing charges, which are considerably higher in the highlands and islands than in many other places. The setting of standing charges is a commercial matter—they are not fixed by Government—and is regulated by Ofgem. However, the Government have taken the view, as we made clear during the election and in subsequent weeks, that the burden of standing charges on energy bills is far too high. We have had a number of conversations with Ofgem and others about that, including on the amount of variance between standing charges across the UK.
We are committed to lowering standing charges overall, and we have been working constructively with Ofgem on that. In August, Ofgem published a discussion paper addressing many of the issues on standing charges. It sets out the options for how we can reduce them, including moving some supplier operational costs off the standing charge and on to the unit rate, which would rebalance some of the issues raised by the hon. Member; increasing the variety of tariffs available to consumers in the market; and, in the longer term, reviewing how system costs are allocated. That will affect consumers in many ways, but in the meantime we want to work with Ofgem on any practical steps we can take to reduce standing charges as much as possible.
Before this debate, we had a debate on the wider questions around fuel poverty. I will not go over many of those points again, but I will just make the point that many aspects of fuel poverty are devolved to the Scottish Government, which in the autumn Budget last year received the biggest settlement since devolution. We have also announced £1 billion through the warm home discount, which provides an annual £150 rebate off bills for low-income households. That has a Barnett impact and there is therefore money for the Scottish Government to invest if they wish to do so.
The household support fund is an England-only scheme to provide support for those most in need. Of course, it is for the devolved Governments to decide how they want to allocate the additional funding, and the Scottish Government have not implemented a like-for-like scheme, but they do have a wide range of support for households in response to the cost of living crisis.
As I said, we had a very good debate just before this one on fuel poverty. The Government are committed to tackling it. Policy in this area is devolved in Scotland, but this is one of many questions about how we bring down costs for all consumers right across the UK. In our plan for clean power by 2030, we commit to delivering what will be cheaper energy—that was confirmed by the NESO this week. It will require a huge amount of effort, but as part of that we are committed to looking at the review of energy market arrangements as well.
This is a complex issue with a number of layers to it. I thank the hon. Member for Moray West, Nairn and Strathspey for raising it again. The challenge of how we lower bills for all is part of the energy trilemma that we are facing around how we demonstrate climate leadership, improve our energy security and lower bills in the long term. It is one that we are tackling head on, and we are determined as a Government to ensure that we do what we can to lower bills for all households across the country—in the highlands and islands, and right across the UK.
Question put and agreed to.
Great British Energy Bill
Michael Shanks ExcerptsTuesday 29th October 2024
(2 months ago)
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Torcuil Crichton
I could have said it in Gaelic. [Laughter.] It is not necessary for that to be part of the Bill or the company.
Communities must be at the heart of what GB Energy does, and community energy is at the heart of much of the wind production in my constituency—although there are commercial plans, too. Scotland’s community-owned wind farms provide, on average, 34 times more benefit payments to local communities. I have given the example of just one village with one turbine, so imagine what three estates with nine turbines could do in terms of community benefit. Let us be in no doubt, the transformative move towards wind-farming—onshore and offshore—will be mean an extremely profitable, multibillion-pound industry. Communities that host such infrastructure, or which have serious infrastructure passing through their areas, must benefit as well. People will not mind the pylons going past as long as some of the profit comes to them. That will be a critical part of the contract between GB Energy, developers and communities. Communities settling and making deals should not be left to chance.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I thank all Members who have made contributions to the debate, and I am grateful for all the points raised in Committee. I thank the witnesses who gave their time to the Committee, as well as the Clerks, House staff and civil servants, who put so much work into legislation such as this. I apologise to the House in advance both for the speed of my speaking and the speed with which I will have to go through the amendments—there is not a huge amount of time left.
First, I want to highlight the three maiden speeches that we have heard today. My hon. Friend the Member for Bolsover (Natalie Fleet) gave an incredibly emotional speech, and spoke passionately about the importance of the state having an impact on people’s lives. I also pay tribute to my hon. Friend the Member for Erewash (Adam Thompson) for telling us, apart from anything else, how to pronounce his constituency, and to the hon. Member for Dewsbury and Batley (Iqbal Mohamed), who I am sure will at least receive a Blue Peter badge in the post for his speech.
Great British Energy is at the heart of our clean power mission, and the Bill provides the statutory basis for it, enabling the Government to deliver on the ambitions that we set out during the election and that the country voted for so resoundingly just a few months ago. Let me turn to the amendments. New clause 1, in the name of the right hon. Member for East Surrey (Claire Coutinho), would create additional reporting mechanisms for Great British Energy. I agree with her that Great British Energy should be accountable, transparent and open in all its dealings and in how it delivers a return on investment. That is why we have made provision in the Bill to ensure that regular updates are given in the form of annual reports and accounts, which will be laid before Parliament for all Members to review. Of course, as a company, it will undergo external audit in the usual manner. As I outlined in Committee, my view remains that adding additional requirements at such frequent intervals is disproportionate and will stop the company from getting on with delivering its mission.
On amendments 6 and 7 in the name of the right hon. Member for East Surrey, and amendment 1 in the name of the right hon. Member for Aberdeen South (Stephen Flynn), every family and business in this country has paid the price for our dependence on fossil fuels during the cost of living crisis. Speeding up the roll-out of clean energy is the only way to get our country off the rollercoaster of volatile international gas markets and to protect families from future energy shocks. That is the argument that the Conservative party used to support but that it seems increasingly to distance itself from, as it has with so many principled positions.
Michael Shanks
I do not have time, I am afraid.
We are unapologetic that Great British Energy is a long-term project for this country, as part of a sustainable, long-term plan to protect bill payers for good. I stand by that commitment today. However, I also say, as we have said about so much of the mess that we have to clean up, that we cannot simply flick a switch and turn everything around, which is why these amendments are inappropriate. Conservative Members would never have made such amendments to a Bill when they were in government.
Let me turn to the amendments on jobs and industrial strategy. The Government are clear that clean energy is the economic and industrial opportunity of our time. Around the world, a race for jobs and industries of the future is speeding up, but for too long Britain has opted out and lost out. Great British Energy is at the heart of our plan to change that. It will help to rebuild the UK’s industrial heartlands through its investments across every part of the UK, and locating Great British Energy’s headquarters in Aberdeen will tap into the high-quality talent pool of Aberdeen and Scotland as a whole. We will use every tool at our disposal to win jobs for Britain. We have established the office for clean energy jobs, and are focused on developing the skills of the future, so that we have a workforce that can deliver what we need in future. Crucially, it is why the Government are, as many hon. Members have said, committed to a proper industrial strategy.
The amendments tabled by the hon. Member for South Cambridgeshire (Pippa Heylings) relate to the timeline for establishing Great British Energy, to energy efficiency and to community energy. Although I welcome and, frankly, share the hon. Member’s eagerness to get Great British Energy up and running as quickly as possible, we will not be supporting amendment 3. The Government have already shown themselves to be committed to setting up Great British Energy as quickly as possible, and there will be no further delays in doing so. Indeed, of all the things that my right hon. Friend the Secretary of State could be accused of, not moving quickly is not one of them.
Michael Shanks
I do not have time—I have a minute in which to finish.
I hope the hon. Member for South Cambridgeshire will recognise that there is really no need to put an amendment such as this one on the face of the Bill. Turning to her amendment on the topic of community energy, she will know, however, that I am passionate about community energy, as are the Government. It will form an integral part of Great British Energy’s local power plan, which will put communities at the heart of the energy transition, giving them a stake in the shift to net zero. As a member of not just the Labour party but the Co-operative party, that is at the heart of my politics and that of many of my hon. Friends. We have been advocating for community energy for decades—this is not a new idea for us—and empowering communities is critical. The hon. Lady and I share that passion and a commitment to community energy.
I can assure the House that the Department is looking to take a cross-government approach—not just through Great British Energy but, crucially, on a number of the points that have been made—to ensuring that community energy projects can be delivered, with all the changes to planning and governance that are required to make that happen. I always want to work with Members across this House, and have done so throughout the passage of the Bill. We continue to engage with the Liberal Democrats and other interested parties on this important issue, exploring options to ensure the Bill has the effects they are seeking. I look forward to further such discussions in the weeks and months ahead. I hope all who have tabled or spoken to amendments today will feel reassured by what I have outlined—albeit considerably more briefly than I was expecting—and will perhaps feel able to withdraw, or not move, their amendments.
This is a truly historic Bill, delivering on the Government’s promise to establish a new national, publicly owned energy champion for our country. It has been a privilege to take it through Committee, and I repeat my sincere thanks to everyone involved in that process. Great British Energy is the right idea for energy security, for bills, for jobs, and for delivering the climate leadership that the people of this country demand of their Government. It is the right idea for our time, hugely supported by the British public, and I urge all Members of the House to support it this evening.
Contracts for Difference
Michael Shanks Excerpts(2 months ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I would like to advise the House that today I am laying draft regulations to implement two amendments to the Contract for Difference (CfD) scheme in time for the next allocation round, supporting the Government’s clean energy superpower mission to deliver clean power by 2030 and accelerate to net zero.
The CfD scheme is the Government’s main mechanism for supporting new low-carbon electricity generation projects in Great Britain. Awarded through regular, competitive allocation rounds, it guarantees a set price per megawatt-hour of electricity for 15 years, indexed to inflation. The income stabilisation that it provides for the generator makes projects that have high up-front costs but long lifetimes and low running costs attractive to investors and lenders, reducing the cost of capital and overall project cost. It also protects consumers when electricity prices are high.
The latest allocation round, AR6, was a great success, securing a record-breaking 131 projects and 9.6 GW of renewable electricity capacity. But we must continually evolve the CfD scheme to drive progress towards the 2030 clean power target and ensure that it reflects the global challenges and opportunities faced by the renewables sector.
These amendments to legislation will extend the option to phase projects under the CfD to floating offshore wind and enable repowered onshore wind projects to apply for a CfD, provided they meet certain criteria.
This Government have committed to radically increasing the UK’s offshore wind capacity. Floating offshore wind is an emerging technology that allows us to access wind resource in deeper waters, which tend to be further from shore and have higher, more consistent wind speeds. CfD phasing policy allows offshore wind projects with a maximum capacity of 1,500 MW to be built in up to three stages. Previously this only applied to fixed-bottom offshore wind. The extension of phasing to floating offshore wind will benefit this emerging sector, de-risking the construction process and helping developers and the supply chain to work with more certainty. This, in turn, will reduce investment risk and enable the construction of larger floating windfarms, as investors gain confidence in successful project completion.
The other amendment concerns onshore wind. From the late 2020s onwards, it is likely that a significant proportion of current onshore wind sites will reach the end of their operational life. When a project comes to the end of its operating life, the generator can choose to decommission permanently, extend its life, or repower. Repowering would require decommissioning and recommissioning of the existing site, incurring similarly high up-front capital costs to that of a new build. Allowing projects to apply for a CfD to repower, in contrast to retiring, could make a significant contribution to the 2030 clean power goal. This amendment offers revenue certainty for onshore wind projects that may otherwise struggle to repower. Without it, we may lose the opportunity to retain and increase this renewable capacity and the societal and economic benefits this confers.
This draft legislation laid today is another important step forward in delivering clean power, shielding families from volatile gas prices and establishing the UK as a clean energy superpower.
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