Making Britain a Clean Energy Superpower

Richard Thomson Excerpts

Thursday 9th November 2023 Commons Chamber

[Claire Coutinho]

The Bill we are bringing forward will unlock billions of pounds in tax, which will go towards helping with the programmes I have just talked about—for example, the cost of living payments we are putting in place. It will also unlock billions of pounds of investment, which will go towards a greener transition, and I am sure the hon. Lady will agree that having more renewable energy in the future will contribute to lower bills for her constituents.

Our leadership is bringing wealth to our economy and to British workers. Since 2010, we have secured £200 billion in low-carbon investments, with potentially up to £375 billion on the way. Carbon capture will see 50,000 high-skilled British jobs in places such as Teesside and the Humber. Our world-leading offshore wind farms will see 90,000 jobs from Aberdeen to Cornwall by 2030. That is the difference between a Conservative Government, focused on attracting businesses, investment and jobs and creating livelihoods, and Labour, with its same old plans to borrow, borrow, borrow, intent on racking up billions of pounds of debt and then just leaving hard-working families to pick up the bill.

Let us look at the record and the Government’s plans to go further. We are a leader in offshore wind power. We do not just have the world’s largest offshore wind farm; we have the second, the third and the fourth largest, and we are now home to the fifth largest too. We expect growth in offshore wind to deliver enough energy to power the equivalent of every home in Britain by 2030 and to support 90,000 jobs. And it is not just offshore wind; it is floating offshore wind too.

We will generate enough solar energy to power 10 million electric vehicles by 2030.

[Richard Thomson (Gordon) (SNP)]

Will the Secretary of State tell us how much the UK’s offshore floating energy capacity will increase by as a result of the licensing round that has just closed?

--- Later in debate ---

[Dave Doogan]

On the hon. Gentleman’s latter point, I say yes. On his initial point, we would not need to be overly sceptical to take a jaundiced view of the tax regime that operates in the oil and gas sector in the UK. Let me leave it at that.

The only way to achieve long-term energy security, which goes in some way to answering the hon. Gentleman’s question, is through renewable energy produced on and offshore in the North sea and all around these islands. Scotland’s future is at the heart of this green gold rush but we are, as usual in this so-called Union, held back by London doing to Scotland, never with, and talking at us but never for us.

Wind energy is demonstrably and by some margin the cheapest to produce of all the energy in the UK, but despite that, the UK Government managed in auction round 5 to offer a price for wind energy that was so low that not a single offshore wind producer could sign up to it. This is cack-handed arrogance from a Department that thought it knew better than industry—a Department that, rather than working in partnership with industry, deluded itself into thinking that it had the whip hand, that it held all the cards. In this, as with so much else, it was entirely wrong. It tried to call industry’s bluff, but the Westminster Government were forced to blink first—you could not make this up.

The interesting thing about that failure in auction round 5 is that when that generation capacity comes online—now it will come online I assume as a result of auction rounds 6, 7 and so on—the gap will still exist in the supply pipeline. We do not have the energy infrastructure to take that generation from where it is being generating and deliver it to industry and homes across Great Britain. That infrastructure is not there. The Government talk about how good they are on a global scale. They love to trumpet their record—this ridiculous debate heading “clean energy superpower” is specious nonsense—which betrays the fact that we cannot even deliver the energy that is being generated today. This Government are paying generators to switch their wind off, but the demand still exists, so where does this energy come from? Yes, gas. Every way that the consumer turns in this country, they are being let down and circumvented by this Government.

We could augment the grid and network infrastructure by properly supporting community energy ownership and generation. But let me be clear: there is £10 million for England only—perhaps the Minister could clarify whether that will be consequentialised for the devolved nations—which is not properly standing up for community generation. In Scotland, community-owned wind farms average £170,000 a year for community benefit payments per installed megawatt hour—an astonishing leverage of capital into communities, compared with £5,000 from standard community benefit payments.

Not only do communities fund those projects themselves —no public money is used in their construction—they solve the problems of the local community, including fuel poverty, improving home insulation and upgrading heating systems. Local communities know better than the UK Government what their priorities are, and are willing to fix them themselves. I would have thought that that was pretty consistent with Conservative ambitions—the hon. Member for Banff and Buchan (David Duguid) may want to intervene—of self-reliance and resilience, but apparently not.

Thankfully, the Scottish Government recognise the huge opportunity of community energy schemes to empower communities, solve those challenges, and reduce the need for vast infrastructure investment projects through the community and renewable energy scheme. In Scotland, the Government have provided more than £58 million. Contrast that with the £10 million from the English Government for England—it is not actually £10 million anyway, because £1 million is for administration; it is really only £9 million—and we can see which Administration are supporting community energy generation, and which are not.

Time and again, we hear from local community groups that there is no support for gaining connection to the grid, and that the Government are utterly apathetic regarding the benefits of community energy generation. Perhaps we can get an answer today on when the Government will launch the much-anticipated consultation on the barriers blocking growth in community energy generation, given their promise to do so back in September.

This debacle has needlessly set back wind production in auction round 5, and we need to see something very substantial in auction round 6. I assume that we will have a realistic strike price for offshore in auction round 6. I hope that it will be around 50% to 60% inflated over what was in auction round 5, in cognisance of supply chain constraints, construction price inflation, and the challenges of capital expenditure and attracting investor confidence in the UK, which of course has taken a real battering after the Prime Minister’s announcements to row back on climate emergency legislation.

[Richard Thomson]

My hon. Friend is making a marvellous speech pointing out the shortcomings of the Government’s approach to accelerating renewables and to the barriers onshore. Does he, as I do, detect the remnants of an anti-growth coalition living on among those on the Conservative Front Bench?

[Dave Doogan]

That would depend on what we want to grow. If we want to invest substantially in renewable energy and the technologies of the future, then yes, I do. If we want to invest in Chinese expertise, French reactors and nuclear power plants, then no, I do not. It is very much horses for courses with this Government, and I wish that my constituents, and everyone else in Scotland, did not have to rely on these misguided ambitions any longer than we absolutely must.

--- Later in debate ---

[David Duguid]

Norway is the two. Actually, it is broadly equivalent, but apart from Norway, any gas coming in from overseas has between two and five times the carbon footprint. New oil and gas capacity will reduce exposure to global instability—the kind of instability that we saw when Russia invaded Ukraine. This Bill means that we can reach net zero without unduly burdening families and businesses. Data from the North Sea Transition Authority and the Climate Change Committee tells us that if we produce as much oil and gas from the new wells as we can, that will still merely slow the decline in production. Even with an optimistic 7% year-on-year decline—I mean optimistic from a producer’s point of view—that decline is faster than the average global decline needed to align with the Intergovernmental Panel on Climate Change’s 1.5°C pathway.

Finally, if we follow the SNP’s presumption against new oil and gas or Labour’s Just Stop Oil approach and shut down this vital industry too soon, we will not see a massive transfer of workers to the renewables sector, as is predicted. We will not even see a bunch of unemployed oil and gas workers; we will see a massive exodus of those oil and gas workers, going where the oil and gas industry is being promoted.

[Richard Thomson]

I thank the hon. Member for giving way. In his haste to castigate the SNP for presumptions against oil and gas, will he not at least have the intellectual honesty to recognise that in the climate change compatibility checkpoints, his own Government are introducing a presumption against further development, no matter how weak and feeble that presumption might seem to anyone with a care for the subject?

[David Duguid]

I have heard the hon. Gentleman make that remark before, and I am sorry to say that I completely disagree. A presumption against new oil and gas development is a presumption against new oil and gas development; a climate change compatibility checkpoint is part of an assumption of new oil and gas, so it is not a presumption against new oil and gas. [Interruption.] I have just explained it.

Those workers with their skills and expertise, those supply chains and those service companies with their technology will simply go elsewhere—as I have said—and deliver someone else’s energy security and energy transition. I commend the Offshore Petroleum Licensing Bill for showing this Government’s commitment to not let that happen, and to make the right decisions for this country’s long-term future.

--- Later in debate ---

[Richard Thomson (Gordon) (SNP)]

It is a pleasure to speak in a debate about energy, because it feeds into the most pressing crisis that all our constituents face at this point in time: the cost of living crisis. We know that higher interest rates are not the answer to the inflation they face. Brexit has certainly made things a great deal worse by increasing the cost of imports, but the cost of living crisis has at its core the massive increase that we have seen in the cost of energy. That taps into our energy security and, as we have heard, it taps into the climate crisis, but it also taps into the opportunities for economic transformation as we industrialise—at least, we have the opportunity to industrialise —through the green revolution.

The Government seem to be failing to provide answers in this area. I agree with the right hon. Member for Doncaster North (Edward Miliband)—words that I do not say very often—that I cannot think of a Government, certainly in my lifetime, who have been so ill suited to facing up to the challenges of the era we all face. No matter how graciously it happened to be delivered, the King’s Speech revealed that we have a Government who are not guided by principle, by strategy or by science, whether woke or otherwise. Instead, they appear to have made a lifestyle choice—if I can put it that way—to be guided by the whims of a few hundred voters in Uxbridge, where they squeaked a very narrow by-election victory, in the vain hope that by pandering on the issues that they thought brought them success in that corner of suburban London, they might find a wedge issue that will allow them to progress in the culture war they are waging against everyone in the UK except their core supporters, to try to protect them from the electoral wrecking ball that appears to be coming their way with increasing force and momentum.

To genuinely be a clean energy superpower, three things are needed. First and foremost, we need an energy market that works. We also need a genuine energy transition, not one that just pays lip service to the idea, and we need Governments who are prepared to invest in making that happen. On the first point—having energy markets that work—one of the reasons we have heard for energy bills being so high is the artificial link mandated by Government between the price of electricity and the price of gas, which the hon. Member for Brighton, Pavilion (Caroline Lucas) mentioned in her substantive contribution. That completely distorts the market, artificially inflating the cost of electricity, which hits both industry and consumers hard.

Another reason why our electricity markets do not work is the inadequacy of not just the energy grid, but grid pricing, particularly when it comes to electricity. That means that anybody generating electricity in the north of Scotland pays a subsidy for the privilege of feeding it into the grid, whereas the further south we go in the UK, generally speaking, that turns into a subsidy for the generator. We are left with the utterly ludicrous situation of somebody who wishes to promote a wind farm in the north of Scotland having to pay handsomely to get that energy into the grid, whereas if they were able to reactivate Battersea power station and burn coal in it, they would end up with a subsidy because of the locational pricing structure we have. That is an absolute nonsense. I can see the brows being beetled feverishly on the Government Benches; I encourage Members to think on that, because it is the situation that the national grid pricing structure has given us for years, and it is holding Scotland back.

Turning to the storage of energy, the UK foolishly did away with most of its storage capacity for gas, on the flawed assumption that it would always be able to buy gas whenever it was needed at the price that was right. We have seen the folly of that in recent times, but of course, it is not just gas storage that is important; we need the means of storing electricity, whether through electrolysis at peak times to generate hydrogen that can be stored and released back into the energy system at other times, the greater use of batteries on an industrial scale, or using pumped storage hydroelectric power. I should confess a particular interest in pumped storage hydropower, because my father was an engineer at Cruachan power station in Argyle, and that is where he met my mother. If it was not for that pumped storage power station in Scotland, I would not be here, so I put that interest on the record. [Laughter.]

There are proposals to double the capacity at Cruachan power station, and to develop a very large pumped storage facility at Coire Glas. It is the regulatory role of the UK Government in those projects, or the oversight they have, that will decide whether or not they go ahead. I encourage the Minister—it might be worth her listening to this—to make progress on those projects, because that is one of the ways in which we will deal with the fluctuations of renewable energy to meet the baseload requirement.

That takes me to my second point, which is on how to be a clean energy superpower. We need a genuine energy transition, and that starts with a bit of basic honesty about the role that oil and gas need to play. The unlimited extraction of oil and gas is simply not compatible with our climate obligations. However, we also need to recognise that, even if there was not a pressing climate change catastrophe looming, our domestic capacity is in long-term decline. Any new licences that are issued and actually come to fruition are only going to slow the rate of overall decline, and we need to be making an impact where we really can, which is in licensing new renewables.

The right hon. Member for Basingstoke (Dame Maria Miller) gently chided us about playing politics on this issue. I must say that I always enjoy it very much when the Conservatives decide not to play politics with energy, particularly when it comes to the debate in Scotland. While it is tempting to say that the Labour party now appears to have the policy on oil and gas that the Scottish Conservatives have long accused my party of having, we really need to raise the debate from that level.

In an exchange with the hon. Member for Banff and Buchan (David Duguid), I pointed out the Conservative policy that dare not speak its name: the Government’s own presumption against further oil and gas development. It prompts the question that if any new oil and gas developments do not meet their tests, what then happens? My presumption would be that they fail, and I understand that also to be the presumption of the Government.

[David Duguid]

It is really very simple: the difference is between a presumption in advance of deciding whether we even want new oil and gas and a caveat that we put in place after a decision that we want to produce more oil and gas. A presumption—a “pre-sumption”—is different from a caveat.

[Richard Thomson]

I am not sure I am any the wiser after that intervention. Either a development passes or it fails, and presumably if it fails, it does not go ahead. I will leave the hon. Gentleman to dance on the head of that particular pin.

On the Government deciding to license new fields, we need to recognise that not all of those licences will be taken up and not all of them will produce any significant amount, so when it comes to mitigating where we are, renewables are the only way forward. That is the way to lock in low prices for the future and the way to guarantee energy security.

The Secretary of State, who is now back in her place, was good enough to take an intervention from me, just as she was reaching a rhetorical zenith about floating offshore wind. The answer to my question, which she quite understandably chose not to give, is that the last round of floating offshore wind options would increase capacity by absolutely nothing because not a single bid came in. The reason for that is embarrassing. It yielded absolutely no bids because the price was wrong. The industry told the Government that, and the UK Government persisted in thinking that they knew best. The auction, rather predictably, fell flat on its face, and the result of that auction round was that the increase in offshore wind capacity was net zero.

The final point I wish to make is on the need to invest in making this happen. We need to learn the lesson that future oil and gas can only slow the rate of decline, and that we need to be doing much better in incentivising the technologies of the future. When Prime Minister Boris Johnson paid a visit to the Moray East offshore wind farm, he made a predictably vacuous and facetious remark, saying that Margaret Thatcher was a green pioneer through her virtual destruction of the coal industry. Just as we know there was no just transition for the miners, it looks unlikely that there is a just transition planned for steelworkers who may be affected by recent announcements. We need to make absolutely sure that there is a just transition for the oil and gas sector, but it does not look as though there is anything in prospect from anything the Government are planning, other than that it will be everybody for themselves.

That is in stark contrast to the approach of the Scottish Government, who have earmarked £500 million exclusively to aid the transition, onshore and off, in the north-east of Scotland. That sum is equivalent to the amount that both the Scottish and the UK Governments are putting into the Aberdeen city region deal. The failure —the repeated failure—of the UK Government to match that is not only, I believe, a betrayal of the communities of the north-east of Scotland, but a complete abrogation of the UK’s constitutional and moral responsibilities.

I shall wrap up. What was needed was a King’s Speech that delivered on the means by which we would achieve energy security, that tackled the climate crisis and that delivered the potential for economic transformation, as well as giving relief to hard-pressed energy users. The evidence is that this is not going to happen in Westminster, and it should be devolved. We should be independent, which would be a better place for Scotland to be, so that we can get on with taking the right decisions for the right reasons, off the back of our own decisions mandated by the electorate of Scotland.