Energy Security Strategy

Peter Dowd Excerpts

Tuesday 5th July 2022 Westminster Hall

[Peter Dowd (Bootle) (Lab)]

It is a pleasure to see you in the Chair, Mr Davies. The fact is that if we took the approach of the right hon. Member for Wokingham (John Redwood), we would not have moved on from the use of coal. In the 19th century, coal powered virtually everything, but then oil and then gas started to power things. We have to move on. There has to be a short, medium and long-term strategy. It is fine if people want to ask me, “Well, what are your plans for next week and the week after that?” We can have lots of plans for next week, but there also have to be plans for the medium and long term, and that is what the energy strategy is about.

[John Redwood]

Will the hon. Gentleman give way?

[Peter Dowd]

I will in a moment. The right hon. Gentleman also asked about the alternative energy supply if wind drops off. It has to be part of a comprehensive package—that is the issue. Energy has to be available and one does it in a variety of ways. It is not simply about a turbine going down and that being the end of the matter. There are designs available out there, for example in Cape Cod, where a company, developer, Government or state—call it what you will—can ask about an area’s topography and then design wind turbines to maximise the capacity, and that is built into the strategy. That is how it is done—through technological use of the topography, so to speak.

[John Redwood]

The hon. Gentleman completely misrepresents my views. I was an adviser to the new electricity-generating system at the time of privatisation, when we encouraged and designed a system that carried out a massive switch out of coal and into gas because it was cleaner and a lot cheaper. That was the first green revolution. I hope he will withdraw his slur on me.

[Peter Dowd]

If telling the truth is a slur, I certainly will not withdraw it. The fact of the matter is that the right hon. Gentleman has to come into the 21st century. The system is not working. We have a privatised, market system that, quite frankly, is not working. The problems we are now having because of the Russian invasion of Ukraine just reaffirm that the model is not working and that we do not have the disparate energy supply that we actually need.

I agree with much of what the hon. Member for Weston-super-Mare (John Penrose) said on market reform, so I will not go into that. He also raised the issue of tidal power. My constituency is on the Mersey and overlooks a lot of turbines, but for a long time, since I was a member of Merseyside County Council 40 years ago, we have also been trying to get the Mersey barrage. There are lots of examples of barrages working well across the world—I did have a list of them, but I do not have it to hand—and they are priced relatively well. That is also case in other countries that are pushing the green agenda. The Netherlands are using their topography, as are the Spanish. The Japanese are now virtually in the position where they can have 100% efficiency with wind and a variety of other sustainable energy plans. India, Australia, France, Germany, China and the USA are moving ahead. Yes, the UK is doing well, but we are not doing well enough. We have to move on as much as we possibly can.

One of my concerns is the Government’s approach to community energy companies. A letter from the Secretary of State for Business, Energy and Industrial Strategy to a colleague says:

“The right to local energy supply already exists under the Electricity Act 1989 and Ofgem, the independent energy regulator, has existing flexibility to award supply licences that are restricted… Changing the licensing framework to suit specific business models risks creating wider distortions elsewhere in the energy system, which could increase costs for other consumers and further unintended consequences.”

I do not believe there is any evidence whatsoever for that—quite the contrary—so it would be interesting to hear what the Minister has to say about it. In my opinion and that of many other people, that letter is not factually correct. For example, in a local network, energy loss through the system is significantly lower. That has not been factored into the Government’s strategy, but it should be.

The Secretary of State’s letter effectively pooh-poohs the idea of local community enterprises on the grounds that they will distort the market—well, if we do not have a distorted market at the moment, what precisely do we have? We are here today to push the Government to create an energy market that serves the country. I do not want to go into the issue of nationalisation and public ownership of the energy sector, because my hon. Friend the Member for Birkenhead (Mick Whitley) has already done so, but at the very least we have to have a good look at it, because the market is not working. It is as simple as that, and I would challenge anybody who tells me it is. We have to move on, and as the coalition Government said in their July 2011 UK renewable energy road map—we came to a bump in the road somewhere between 2011 and now—

“The nations of the United Kingdom are endowed with vast and varied renewable energy resources. We have the best wind…and tidal resources in Europe.”

That is as true today as it was 10 years ago, but I am afraid we are not using all the advantages we have as a nation. We have almost an inbuilt potential energy supply, but we are not using it. It is about time that the Government get to grips with that and use what we have now, not just in the future.

--- Later in debate ---

[John Redwood]

Once again, the hon. Lady is in denial. She will not answer the intermittency problem. Does she ever look at the hourly and daily statistics on the grid to see, quite often, how little of our power is renewable-generated? That is because of physics and weather. We have to find technological answers to that. Now, there are technological answers, but at the moment they are not being adopted. They are not commercial and they have not been trialled properly; there may be safety issues and all sorts of things.

[Peter Dowd]

Yes, they have.

[John Redwood]

The hon. Gentleman says that they have been trialled. Why are they not there, then? Why can I not turn on my hydrogen tap now? There are all sorts of commercial issues and issues about how to route it to every home and so forth.

[Peter Dowd]

The right hon. Gentleman is so fixed on this idea of commerciality. There will potentially come a point when the taxpayer—for the sake of argument—decides that the Government are going to invest. I know that the right hon. Gentleman has an ideological obsession with the Government not doing that. However, in the current situation, does he not agree that the state might sometimes have to do just that?

[John Redwood]

But that is happening. We already have one of the most over-managed systems because successive Governments have put in all sorts of subsidies, tax breaks, interventions, price controls and all the rest of it to try to send those signals. That is why we have the current mix—it is not the exact mix the market would have produced.

I fully accept that there is often a role for Government when we try to develop new technologies. I have no problem with that. However, it does require agreement on what that technology is, agreement on the scale of the effort needed and realism about how many years it would take. It is all very well for the Members present to say that they have a vision of everybody using an electric car and having a heat pump. However, if their constituents cannot afford it or do not want it, it does not matter what Members think—they have to deal with the world as it is. We cannot lecture our constituents into having a heat pump. They will have a heat pump when it is affordable, when it is a good product and when they think it makes sense, and they are nowhere near coming to that conclusion at the moment.

The crucial question in this debate is what more the United Kingdom can do at this critical moment. We have to help our allies and friends on the continent who are gas short and oil short and want to get Russia out of their supply system but cannot do so because it would collapse their industry, while Russia is financing a war by selling its oil and gas into Europe as well as elsewhere. I think there is a lot more we can do.

I urge the Minister to see it as both a patriotic duty and a crucial duty to our allies to work closely with our producers and owners of oil and gas reserves in the United Kingdom and maximise output as quickly as possible. Some of the output can be increased quite quickly; for others, it will take two or three years to get the investments in. Will the Minister do everything he can to expedite it? We owe that to our constituents, because gas and oil are too dear—every little extra that we can produce will make a little difference—and confidence in markets might be affected. Above all, we owe it to our allies, who will otherwise be financing Putin’s war.

--- Later in debate ---

[Owen Thompson (Midlothian) (SNP)]

I congratulate the hon. Member for Birkenhead (Mick Whitley) on securing this debate. It has been great to hear a range of views.

It is obvious to many that the Westminster style of government is often one that seems to tinker around the edges and prioritise flashy point scoring over a long-term strategy. That is why it is strange to see something that calls itself a strategy, but is really just tinkering around the edges, rolled into multi-year plans. The energy security strategy comes at the right time to address the climate crisis and the cost of living, but fails on both fronts, not least because of the gaping holes in it.

I will first touch on the near total lack of support for tidal energy, which we have heard from other Members.

[Peter Dowd]

The hon. Gentleman reminds me of the point that the hon. Member for Weston-super-Mare (John Penrose) made about cost. The Sihwa tidal scheme in South Korea, the Rance scheme in France, the Annapolis scheme in Canada, the Jiangxia scheme in China and the Kislaya Guba scheme in Russia all want to expand because they recognise that it is a cheap way forward.

[Owen Thompson]

I agree. We do not even need to look that far; we only have to look at hugely innovative tidal projects like Nova Innovation in Leith, which could be game changers with the right support, yet the strategy’s only commitment to any tidal energy is to simply explore it.

The energy sources need a guarantee and ring-fenced money every year. After years of campaigning from Members in my party in particular—I congratulate my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) and my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford)—the Government finally agreed last year to provide £22 million in ring-fenced funding for tidal energy. That is welcome—I make no bones about that—but £22 million simply does not reflect the huge potential of tidal, which can produce more than 15% of the UK’s energy generation capacity, according to a Royal Society report last year. A £71 million pot, which is what the aforementioned Members had been pushing for, could unlock £140 million of private investment, creating around 400 jobs, whereas the £22 million mentioned before would unlock only £20 million and create only 100 jobs.

Whether it is £20 million or £70 million, there is no guarantee that the funding will continue. How do we and, more important, investors know that it is not just a one-off? The reality is that without this funding they will be forced to compete for contracts with long-established companies. It is like trying to force a start-up to compete with Google completely unaided.

Geothermal energy is another area that gets only a passing mention in the strategy. The strategy ignores the huge potential of and appetite for mine water geothermal, which is a way to tap into heat from water in abandoned mineshafts, using the past to power our future. The Coal Authority and local activists are doing great work on this front, but central Government funding is patchy and unco-ordinated. We have heard about the projects in Spain and the Netherlands, which have already taken research from Scotland—Midlothian, in fact, in 2003—and rolled it out into huge-scale geothermal projects.

My constituency of Midlothian, with its huge wealth of geothermal mine water potential, could be an energy powerhouse if the Government got their act together and supported a pilot or a large-scale trial. It is not just my constituency, though; across Scotland, mine water could deliver £333 million of economic growth and about 9,800 jobs, yet the strategy does nothing to unlock that potential. That reinforces the points made about projects that could move faster and be brought online very quickly.

For a far better model, look at Norway. Our Nordic neighbour relies on hydro and heat pumps, while exporting its oil and gas to neighbours. The combination makes it a far more resilient to geopolitical shocks, such as those we are currently suffering from. Scotland could and should follow suit, and would were it not for energy being reserved to this place. We have the skills. The heat pumps used in Drammen were made in Glasgow, for instance.

The UK is underdeveloped when it comes to district heating, relying on individuals to pick up the cost. Of course, that is intentional; it drives individuals into fuel poverty while making huge profits for the suppliers. This is why the strategy’s commitment to £30 million of heat pump investment is money spent in the wrong place. It should be invested in large-scale district heating solutions. Instead, it will end up with consumers forking out once again.

I cannot pass over the scandal that sees Scotland facing the highest grid charges anywhere in Europe. Our grid still works on outdated assumptions that prioritise the construction of plants near large population centres. In the green energy age, it is rural communities that will generate our power—from the coasts of Orkney to the hills of Galloway. It is time that we overturn the current model.

We then come to nuclear. Where do I start? Nuclear build costs have trebled over a decade, while solar and wind costs have more than halved. No wonder Hinkley Point C is now nearly 50% over budget and running five years late. If we are serious about the “security” in “energy security”, we cannot ignore the radioactive elephant in the room. Nuclear waste still needs to be buried for hundreds of years; there is literally no other working solution. It is time for the Government—and Labour—to drop their nuclear obsession and come into line with the Scottish Government, who recognise the contribution that nuclear has made in the past, but oppose new nuclear stations while the current technology renders them slow to build and environmentally unsustainable.

Of course, the strategy works within the parameters of the Government's contracts for difference. When contracts are awarded based on big wallets rather than national interest, it is unsurprising that so many of Scotland's turbine manufacturing yards are struggling to stay in business despite their huge potential.

Energy efficiency has been ignored once again. Technology and methods that increase the efficiency of our energy use will reduce energy demand, which gives us better security should crisis hit. British homes lose heat up to three times faster than European homes. From the sick man of Europe, we are becoming the cold man of Europe, but instead of pushing for new builds to be insulated and energy efficient, we are stuck with retrofitting. Yet again, the mindset is to tinker around the edges. The Scottish Government spend a whopping four times per capita more on energy efficiency measures than the UK Government. Will the Minister commit to following suit?

I do not know whether the Scottish Government’s opinions matter at times, though, given that they were not even consulted prior to the publication of the strategy—something they have been very critical of, given the major role that Scotland plays in meeting the UK’s energy needs. It is clear that Westminster just cannot bring itself to overhaul the outdated status quo, even when a crisis demands it. For as long as Scotland remains part of the UK, we will be held back by its antiquated and unco-ordinated private energy systems. Scotland cannot afford this broken system any longer, so I look forward to next year, when we can have our own say.