Energy Infrastructure

Baroness Winterton of Doncaster Excerpts

Wednesday 5th July 2023 Commons Chamber

(3) the sum authorised for issue out of the Consolidated Fund be reduced by £3,200,982,000.—(Andrew Bowie.)

[Madam Deputy Speaker (Dame Rosie Winterton)]

The debate will be opened by the Chair of the Select Committee on Welsh Affairs.

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[Stephen Crabb]

I do agree, yes. I made the point earlier that, with fixed-bottom offshore wind, we perhaps missed some opportunities for getting investment in local supply chains, but that is changing too. I recognise that, on the east coast of England, there are some exciting investment plans and jobs being created by large-scale developers. We want that and more for this new industry of floating offshore wind that we hope to see in the Celtic sea. I know that floating offshore wind will also be important in Scotland.

I have two more concerns to flag up, Madam Deputy Speaker, and then I promise to wrap up. One is about skills. It is difficult to find a skilled welder in south Wales at the moment, because so many of them are working on the enormous project at Hinkley Point. I read the other day that around one third of all the currently qualified welders in the country are due to retire by, I think, 2028. There is an enormous need for greater investment in apprenticeships and those technical skills that we will rely on if we are to see anything like the transformation in our energy infrastructure that we are talking about this afternoon. It will require steel fixers, welders, pipe fitters, brickies and carpenters and all those trades, which have been devalued by the political class—all of us here—in the past 20 or 30 years, and we need to see that turned around and jobs being properly rewarded.

The final point is about planning consent. If we are to see the scale of investment that is required—whether in grid capacity, the deployment of turbines, offshore or onshore, or any other aspect of this renewal of energy infrastructure—we will need to see quick, timely approvals and for those approvals to be done properly by planning authorities. I do not see many planning authorities with the skills and resources required to be able to handle the volume and the technical detail of the kind of applications that will be forthcoming. There is a real need for the Government, and for us in Wales—it is the primary responsibility of the Welsh Government—to think about how we resource planning authorities for the future.

In conclusion, I thank the Backbench Business Committee for the opportunity to bring forward this debate. It is an exciting and challenging time for energy infrastructure across the UK. We see many reasons to be optimistic, while also recognising the scale of the challenges ahead. However, if we are to succeed in this, it will not be by marching on to the streets and stopping traffic, or by retreating off grid and living in some rewilded seclusion; we will do it through good science and good engineering, and with good policy and ambitious leadership from Government, which I hope is where the Minister comes in.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Energy Security and Net Zero Committee—[Interruption.]

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[Angus Brendan MacNeil]

The hon. Lady says from a sedentary position that there is not perfection either. This is the space of politics and debate, but there has been an awful lot of learning, with many august committees and people who have been experts in this area for a number of years saying some fairly robust things. I hope the Government will take that on board and react to it so that the next report is less robust and more positive.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. A little reminder to Members that if they intervene on another Member, it is courteous to stay until the end of their speech. Sometimes people have to be reminded of that.

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[Lia Nici (Great Grimsby) (Con)]

It is a great honour to follow my hon. Friend the Member for Stroud (Siobhan Baillie). Who knew about radiator sludge? It is a case in point. One of the privileges of being a Member of Parliament is that we learn things we never would have thought we would learn—we have conversations about things we never would have thought we would have conversations about—when we came to this place.

My reason for standing up to speak and support what the Government are doing on energy and energy bills is that the Humber region is known as the energy estuary. The Humber and northern Lincolnshire power much of the country through electricity power, refineries and food, so we are a vital area for energy. In my constituency in particular, we have so many people working in refineries. If you have a certain brand of mobile phone, you will have a bit of the Grimsby and Cleethorpes constituencies in your phone, because we have a refinery that produces the bit of coke that goes into many mobile phones. It is one of those strange innovations that we all take for granted and do not realise are made in the UK.

We have not only refineries and power stations, but the biggest offshore wind farm base, off the constituency of Grimsby. We also have the largest operations and maintenance hub on the globe, based in Grimsby, on the docks. It is a huge industry that is still growing. We need more people in the UK and in my constituency to understand how important it is for the future. We are also innovating with green hydrogen. For those who do not know what that is, it is produced by totally renewable ways of working. Those innovations will enable us to power ahead and ensure that we can reduce our carbon emissions.

The Humber region—and specifically the south Humber region—is the biggest emitter of industrial carbon dioxide in the UK, and that is because of the industries that we have there. It is vital for us to ensure that carbon capture, utilisation and storage, which was the subject of a conversation I had with the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) earlier in the debate, is pushed forward. I thank the Secretary of State for meeting me last week, along with my hon. Friend the Member for Cleethorpes (Martin Vickers), to give an update on exactly where we are.

We have two bids in the Humber and northern Lincolnshire region. As the hon. Member for Kingston upon Hull West and Hessle mentioned, carbon capture, utilisation and storage needs to happen very quickly in the Humber in particular, because without it we will not reach the UK’s net zero targets. It emerged from our very positive meeting with the Secretary of State and his officials that the track 1 extension for CCUS will be updated and announced later this year. Track 2 has already been announced, but there will be an update by September, and allocations will take place by quarter 4.

I work with the industries on a regular basis, along with colleagues, and I have been working with the net zero Humber team and the Project Viking team every fortnight to discuss exactly where we are and where things are happening. I am very happy with the way in which the Government are moving forward with renewable energy and with carbon capture, utilisation and storage. We are working together very well, and it has been a very positive experience. I thank Ministers and officials for the hard work that they are doing, which I know will continue to ensure that the UK is a powerhouse for energy and, in particular, all forms of renewable energy.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call the Scottish National party spokesperson, I must emphasise again how important it is for those who have contributed to the debate to be here for the winding-up speeches.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I am sure you do not need to remind people to come and listen to me starting the wind-ups, Madam Deputy Speaker.

I commend the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), the Chair of the Welsh Affairs Committee, for opening the debate. The fact that 13 Back-Bench Members followed him shows what an important subject he picked. This is clearly the best subscribed of the estimates day debates.

For the most part, there has been consensus today. Everyone seems to understand the rate of deployment of renewable energy that we need, the number of grid upgrades required, the need to improve consent processes, the opportunities to create new green-based jobs, and the importance of training people in the right skills and of efficient workforce planning. That ties in with the just transition as well. There was also broad agreement on the benefits of floating offshore wind, and cross-party agreement about the importance of carbon capture and storage at Humber and Tayside. I shall say something about Acorn later. Four speakers were in favour of new nuclear energy, so there is a kind of consensus there, although I will shatter that consensus shortly. With one honourable exception, everyone also seems to agree that we need to get on with delivering net zero.

Let me begin by raising a point that no one else raised: post-Brexit trading arrangements for energy. Energy UK has estimated that they are adding £1 billion a year to our bills—£1 billion that could be spent better elsewhere. It could, for example, upgrade 100,000 homes a year to an energy performance certificate C rating, or it could just be taken off our bills, given the cost of living crisis. I want to know what the Government are doing to improve the energy trading arrangements to remove this £1 billion surcharge from our bills.

I said a moment ago that I would break the consensus on new nuclear energy. Although there is clear cross-party support from Labour and the Tories, we in the SNP remain opposed to it. Nuclear is the only energy technology that has become more expensive rather than cheaper over the years. On an estimates day, it is worth noting that the estimate of the cost of nuclear decommissioning has risen by a staggering £130 billion. Why do we want to build more new nuclear and increase the nuclear waste legacy? This would also require the construction of a new nuclear geodisposal site. So nuclear is expensive, and it is not the way forward. No successful European pressurised reactor project has yet been built anywhere in the world. Hinkley Point C is years behind schedule, and the costs have increased to £33 billion. I therefore do not understand the rush to enter into a new agreement to build another nuclear power station at Sizewell C, which will clearly cost between £35 billion and £40 billion—money which, again, could be much better spent elsewhere.

The strike rate for Hinkley is £92.50 per MWh, as opposed to £40 per MWh for offshore wind, but the renewable energy contracts for offshore wind are only for a 15-year period, whereas the Hinkley contract is for 35 years. The Government want to enter into a 60-year contract for Sizewell C. This is collective madness. There are also hidden subsidies. If EDF connects with the grid and starts generating electricity, it will be paid for doing so—let alone the strike rate. Scottish renewable energy projects, meanwhile, pay the highest grid connection fees in Europe. How is that equitable? There is another hidden subsidy for EDF. The strike rate of £92.50 was supposed to be reduced by £3 per MWh if the Government entered into a contract with Sizewell C, but the Government is now dropping that contract. I should like to know why they are giving that hidden subsidy to EDF, and why they are not holding it to reducing the strike rate.

The fact is that we do not need big new nuclear projects. We have heard talk of the need for nuclear when the sun does not shine and the wind does not blow, but nuclear is not always there when we need it either. Over a 10-year period, each nuclear reactor is offline for nearly 25% of the year. Even the reactors at Sizewell B, the newest nuclear station in the existing fleet, are offline for between 15% and 20% of the year. Nuclear is not the reliable baseload that we keep being told it is, and that is why we need to look at other technologies, such as pumped storage hydro and storage in general.

Another aspect of nuclear that we have heard about today is small modular reactors. As I said in an intervention, that is a future technology, although people keep talking about it as if it were already here. There is no approved regulated design for a small modular reactor yet, and if Rolls-Royce sticks to the assessment that has been made, it is not due to be completed until September next year. How can the Government launch a competition to pick a small modular reactor when there is not even a design that complies with UK regulations? That makes no sense.

The talk of small modular reactors makes them sound like small compact units. The capacity of Rolls-Royce’s small modular reactor will be 475 MW, which is nearly 50% higher than the international definition. Moreover, it will be the size of two football pitches, which is not exactly small in my book. As for the cost, it is estimated to be between £1.5 billion and £2 billion per reactor. The kicker is that Rolls-Royce wants its own contract to supply between 12 and 15 small modular reactors. What it is actually asking for is an order worth between £20 billion and £30 billion in up-front capital costs. Again, that is money that could be much better elsewhere, and there are existing technologies that could be deployed much more quickly.

That could include pumped storage hydro. I keep returning to this point, but SSE’s Coire Glas scheme in the highlands has all the consents in place. It is spending £100 million just now on up-front design works. That project could be delivered by 2031. With £1.5 billion of private capital investment, there is no Government capital subsidy needed; all that is needed is a revenue guarantee and a cap and floor mechanism. The Secretary of State said yesterday that he has been in talks with SSE, but he has not been in proper talks with SSE about developing a cap and floor mechanism. We want the Minister to take that point away today. Please will the Government listen? Up to 7 GW of pumped storage hydro could be deployed in Scotland—dispatchable energy that will be there when the wind is not blowing. It would utilise spare excess energy, taking it when it is cheaper and dispatching it when there is a need, so it is the perfect complement to renewable energy.

On carbon capture, we really need definitive timescales for track 2 clusters. As was said earlier, investors are getting nervous about the timelines. Yesterday, the Secretary of State was talking about confirming track 2 this year, whereas in the Energy Bill Committee recently, the Minister said that there would be an update this summer. We need certainty. We need to get Acorn up and running and give it the backing it needs. Acorn does not need a pipeline, and it is strategically important because it can import carbon dioxide from other clusters in the UK and store it. It should be a UK strategic site, so we really need to get it up and running.

Finally on technologies, I want to talk about tidal stream. Concerns have been raised about strike rates for AR5 with respect to wider renewables. The same pressures apply to tidal stream. We need to look at the strike rates that it is expected to achieve. We need to find the pathway to allow it to scale up. Ringfencing the pot for AR5 was welcome, but frankly £10 million is not enough. We need to be willing to commit more to support tidal stream in future.

This has been a good debate, as I say. Everybody bar one agrees about the need to hit net zero, and I think we can all see the opportunities for job creation. Going forward, we need to grab those opportunities.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister.