Energy Trilemma

Selaine Saxby Excerpts

Thursday 23rd March 2023 Commons Chamber

[Selaine Saxby (North Devon) (Con)]

I thank my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) for securing this important debate. We do indeed face a worrying trilemma as we seek to balance energy affordability with security of supply and sustainability. I believe the solution lies in clean energy, with renewables generated here in the UK tackling security concerns. As the renewables sector develops, prices come down.

One cannot talk about energy without being aware of the source of our current focus: Putin’s illegal invasion of Ukraine. Even though we were not directly reliant on gas from Ukraine, our reliance on fossil fuels links our energy prices intrinsically to the international market, which shot up post invasion.

Under this Government, huge strides towards green, sustainable energy sources have been taken. The UK is ranked fourth out of 127 countries on the world energy trilemma index, our energy generation in the last decade having reversed from 40% coal in 2012 to 40% renewables last year. We need to continue this drive towards affordable, sustainable energy generated in the UK. But is renewable always sustainable, and is sustainable always renewable?

Living somewhere as beautiful as North Devon, where we have renewable energy sources in abundance—the wind rarely stops blowing, we have massive tides and the sun shines most of the year—it is no wonder that locals look to community energy and are increasingly bewildered that they cannot plug their solar panels into the grid. I know the new Department is working to upgrade our grid, but the pace of that is reducing our ability to move more rapidly towards our own energy supply. We must rapidly improve access to the grid for small businesses and farmers who wish to generate energy using solar or wind turbines on their property, and who wish to sell the excess back to the grid or hope that battery storage technology will rapidly catch up to enable them to use the energy later.

Community energy is hugely popular. While recognising the grid constraints that may limit the feasibility of supply in some parts of the country, I hope we can find ways to enable sites that generate low-carbon electricity on a small scale to export their energy to an electricity supplier on fair terms. Larger suppliers should work with community schemes to sell the power they generate to local customers. Amendments to this effect have been tabled in the Lords, and I hope steps can be taken to accommodate the amendments regionally, where viable, and to explain why that cannot happen in other regions. What is being done to progress these measures, which have cross-party support from almost half the MPs in this House?

Localised schemes tend to be supported, and innovative biomass schemes, such as the chicken dung generator in South Molton in my constituency, help local farmers while generating enough energy for the town. But is all biomass equal? Small biomass schemes that use local resources are, indeed, sustainable and, through replication, potentially scalable. I would argue, as would numerous eminent scientists, that biomass generation involving 4 million trees a year, shipped around the world on diesel vessels, is neither sustainable nor scalable.

Woody biomass energy generation in sparsely populated countries with large forested areas may be able to claim sustainability, but, in a country that is already importing wood to build houses because of the low levels of forestation, that is not the case. Not only do we need to build homes and furniture, but much can be built from the same waste wood currently burnt for energy, which is causing surging wood prices, not to mention that burning wood releases carbon into the atmosphere, whereas building retains the carbon in the product.

We need to ensure that we are accurately calculating the true carbon costs of our different energy sources, including the costs of bringing the raw materials to the site of energy production. As we go through the current transition to a cleaner and more secure energy supply, we clearly need many different energy sources, but we also need to be honest about the true environmental costs of some of the decisions we are taking, and we need to ensure we have a strategy that increasingly relies on affordable, home-grown energy sources that are genuinely sustainable.

Genuine renewables are, indeed, sustainable. Some of the newer sources, such as floating offshore wind, are themselves dealing with inflationary pressures. Although I warmly welcome the Department’s commitment to floating offshore wind, and recognise that annual auction rounds will attract more developers into the market, the progress of allocation round 5 has, to date, not been smooth. As chair of the APPG for the Celtic sea, I am delighted that today we have seen the announcement of the Celtic freeport and remain optimistic that the announcement on funding for ports will recognise the importance of supply chains to securing fantastic jobs all around the Celtic sea—not to mention that, although the wind does not always blow, it blows the other way round in the Celtic sea, to the north-east, which is why it is vital that multiple schemes progress tangentially.

There is great optimism about the future of floating offshore wind in the Celtic sea, and that the current round’s budget can be extended to recognise the increase in the number of schemes ready to progress, but this does not tackle the damage already done due to the nature of the negotiations. Developers have repeatedly expressed concern that the strike price in this round is too low. I recognise that this is a complex negotiation and that there is an element of who blinks first, but to retain our world-leading position in the sector we need to recognise that other international opportunities are rapidly opening up for the same companies. Why would they invest here if they start with a cripplingly low strike price? Developers that have already invested many millions of pounds into these schemes have been told that officials do not believe their figures and would rather let the round fail than discuss the price—not to mention that it is not all about price, as this debate clearly highlights. Floating offshore wind is fundamental to our longer-term energy security. As we have seen with other sectors, new technologies need a leg up to get them up and running.

I struggle to understand how we are now committed to developing a Celtic sea supply chain, yet have possibly created an auction round that may see no projects progress in the Celtic sea. The Spanish Government recently saw a round more or less fail because of a similar failure to recognise the inflationary pressures developers are under. One investor has already publicly stated:

“UK Offshore is over for us now”.

I fear that we are sleepwalking into a missed opportunity, with unintended long-term issues with developers. I hope that no one needs to blink and that with eyes wide open we can work with the developers to ensure that multiple projects progress in this round.

We have come so far, led by this Government. I hope that the new Department will continue this journey, recognising that it is already named to tackle energy security and sustainability. I know that, given the huge amount of financial support already given to consumers and businesses, affordability is drummed into everything it does. I hope that this tripod approach continues and that legs do not get lopped off in problematic negotiations as we move through the transition from fossil fuels to a cleaner, greener, cheaper and more secure future energy supply.