Oral Answers to Questions
Debate between Michael Shanks and Edward Morello(3 weeks, 3 days ago)
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Edward Morello (West Dorset) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Accelerating the clean energy transition away from insecure and expensive fossil fuels towards cheap, clean renewables and nuclear power will help decouple gas and electricity prices. As a result, we will reduce the exposure of consumer bills to volatile international crises and ensure that we never again face the kind of cost of living crisis that the last Government presided over.
Edward Morello
New solar is 11% cheaper than the lowest-cost fossil fuel, and onshore wind is 39% cheaper, yet the marginal pricing system that ties electricity costs to the market price of gas has resulted in British consumers enduring the fourth-highest global energy prices during a cost of living crisis. Does the Minister agree that decoupling electricity prices from the gas market is essential if consumers are to enjoy lower-cost energy?
Michael Shanks
I thank the hon. Gentleman for his expertise in this area, which he often brings to the House. He is absolutely right that decoupling from volatile and expensive gas prices is critical, and the journey we are on to develop clean power by 2030 will do that. Our objective is to deliver a clean power system where gas only provides the back-up, rather than setting the price, as it currently does. Too often—80% of the time—we rely on gas to set the price. We are trying to remove that, and to build a clean power system for the future.
Cost of Energy
Debate between Michael Shanks and Edward Morello(4 months, 3 weeks ago)
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Michael Shanks
I will come to the right hon. Gentleman’s point about transmission costs later, because it is important, particularly when it comes to how we grapple with constraint costs. The truth is that we will have to build more network infrastructure. I hope he will support the construction of that, although I suspect he will not. We also want to review energy market reforms to look at how we deal with some of these issues. I will come back to the important point, which a number of hon. Members raised, of how we build an energy system for the future. The question of balance is key. We do not want a renewables-only system, although renewables will be incredibly important. We announced last week our commitment to rolling out much more nuclear to provide the baseload and the security of supply. We have the ability to place small modular reactors across the country near centres of demand, such as the data centres that we will see in the future.
Edward Morello
The hon. Member for Beaconsfield (Joy Morrissey), representing the former Government, tried to mischaracterise the need to upgrade the grid as a cost of renewables, but does the Minister agree that we need to upgrade the grid regardless of what technology we use? We lose 10% of the energy we generate through transmission. It is an old grid and, regardless of the technology we use, we need to upgrade it.
Michael Shanks
The hon. Gentleman makes a very good point. Upgrading the grid is important for transmitting the clean power that we want to generate in the future, but it is already 50 or 60 years old, and it is creaking under the pressures it has operated under for a very long time.
There is real need to upgrade the grid right across the country. The truth is that the previous Government recognised that that was important. They launched the idea of the great grid upgrade before we did, but they are now running away from a lot of that. That is hugely disappointing, but it will not get in the way of our moving forward to make sure that we build the grid of the future. Yes, we need to meet the demand for now, but we know that by 2050 electricity demand is likely to double in this country. If we do not build the infrastructure now, it will be the weakest part of our economic strategy in the future. It is essential we build it now, but we want to bring communities with us.