Energy Bill [Lords]

Selaine Saxby Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[Selaine Saxby (North Devon) (Con)]

The Bill is a crucial piece of legislation for delivering a cheaper, cleaner energy system and increasing investment in clean energies. As the new Department is named the Department for Energy Security and Net Zero, one hopes it will deliver on both. I do not need to rehearse the challenges we face in respect of how being overly reliant on imported gas has created higher energy prices. Much more needs to be rapidly done to improve our energy security. If we create the right legislative framework, and invest in renewable and sustainable energy supplies, we should ensure that we also achieve the goal of moving towards net zero.

There is much to welcome in the amendments from the other place. In particular, I wish to speak to clauses 272 and 273, formerly in the Local Electricity Bill, which are backed by 318 MPs, including 125 Conservatives. These measures seek to enable community groups to sell electricity to local customers. It is still bewildering to me, as someone who lives somewhere sunny, windy and with a huge tide, why this has not progressed sooner. Clause 272 sets up a community and smaller-scale electricity export guarantee scheme to provide a guaranteed income for the electricity from small-scale renewable energy generators with a capacity below 5 MW. Surely, with dramatically rising energy prices and a system still reliant on fossil fuel imports, new local, secure, low-carbon generation must be desirable.

Clause 273 sets up a community and smaller-scale electricity suppliers services scheme, which would enable them to sell the electricity generated to the local community if they wish to do so. That would facilitate a community energy tariff that can be offered to consumers local to the site. Locally generated electricity would reduce our dependence on imported energy and increase the resilience of our domestic energy supply. It could help cut bills and save emissions. There is huge support for these clauses across this House, and I hope that Ministers will ensure they remain in this Bill. Ministers have previously opposed them on the basis that they amount to a subsidy. However, that would be the case only if the guaranteed price were many times the prices of other sources, but that is not what these clauses mean, with a suggested rate of about 5p to 10p per unit.

Bizarrely, these same Ministers are still happy to subsidise the burning of trees for woody biomass, creating one of the biggest emitters of carbon dioxide in the country. We are subsidising that to the tune of £1.7 million per day. Even advisors to the provider of this plant have detailed that it should

“reassess its criteria for determining carbon neutrality”.

We are seemingly keen to subsidise this polluting form of energy at a time when I am sure we are working towards net zero, yet there seems to be far less subsidy for some of the genuine renewables that we could make use of, for instance right here in the Celtic sea—I declare an interest as chair of the Celtic sea all-party group. But this year’s contracts for difference auction is expected to deliver less than half the renewable capacity we need to hit our 2030 offshore wind target, all due to an administrative strike price not keeping pace with rising supply chain and financing costs and a Department that said that it did not believe the industry’s figures.

As the Crown Estate gets ready to launch its next leasing round in the Celtic sea, aiming to catch 4 GW of floating offshore wind, I hope that we will be able to help get these floating offshore wind turbines out to sea rather than subsidise the burning of trees to secure our future energy supply. It is inconsistencies such as this that make me support new clause 271, which would place a duty on Ofgem to consider net zero. Investment and subsidy decisions would hopefully then ensure that the true environmental impacts of the energy produced were considered.

Clause 204, on improving energy efficiency standards in our homes, is hard to argue with. However, the practicalities of the issue have already seen long-term landlords change to short-term holiday lets in locations such as my beautiful North Devon constituency. We need to ensure that any move to improve energy efficiency applies to short-term holiday lets as well long-term rentals —we still use energy and emit CO₂ when we are on holiday.

However, I have concerns about a blanket imposition. In rural and coastal Britain, our housing stock is older and draughtier, and it is harder to bring up to the standards of newer homes given planning restrictions. We need to better understand rurality. I will support any amendments that my right hon. Friend the Member for Camborne and Redruth (George Eustice) tables, as it seems bewildering to me that we are requiring all off-grid properties to adopt air source or ground source heat pumps when we could enable those with oil boilers to convert to hydrogenated vegetable oil at a fraction of the cost. The cost of such fuels is currently prohibitively expensive, but given that the Government have long recognised the value of renewable fuels, such as hydrotreated vegetable oil in the transport sector through the renewable transport fuel obligation, surely it is possible to devise a similar incentive mechanism, extended to the use of renewable fuels in domestic boilers for off gas grid properties. This could be achieved by some tweaks to clause 10, in part 3 of the Bill.

We should be able to support community energy generation given the abundance of renewable energy sources, particularly in the rural south-west. We must focus scarce subsidies on fuels that are truly renewable and work to harness the wind in the Celtic sea, which, in turn, will support the UK’s longer-term energy security strategy.

There is much to commend in the Bill, but I hope that Ministers will look favourably at these amendments and recognise that, while energy security is vital, we also need to work towards net zero. Frankly, though, some of the current subsidies risk delivering the opposite outcome.

Powering Up Britain

Selaine Saxby Excerpts

Thursday 30th March 2023 Commons Chamber

[Graham Stuart]

The hon. Gentleman is a little unfair. If one of the two selected track 1 projects were to come off track, the reserve would move up—that was the point. It was an indicator of the maturity and viability of the Scottish cluster. We are moving fast. We have announced the launch of track 2 now. We believe that the Scottish cluster and the Viking cluster in the Humber are the two leading contenders best placed to do it, and we will move forward with speed. I look forward to working with him and colleagues to make sure that the Scottish cluster can play a full part in our future.

[Selaine Saxby (North Devon) (Con)]

I thank my right hon. Friend for today’s announcements and for his ongoing engagement on the new Department’s work. Will he reaffirm his commitment to rapid delivery of floating offshore wind in the Celtic sea, along with the vital UK-based supply chain and port infrastructure right around the Celtic sea coast?

[Graham Stuart]

My hon. Friend is a member of a small, elite group of colleagues who are relentlessly focused on ensuring that the energy transition is done in the right way, leading to jobs and prosperity for her constituents and others. I can confirm that. Having announced the launch of FLOWMIS today, we look forward rapidly to supporting the port infrastructure that is critical to the delivery of floating offshore wind, and the maintenance of the UK as the world leader on this vital technology. Estimates show that only about 8% of potential offshore wind capacity globally is on a fixed bed. For those who have a shallow continental shelf like us, 92% is floating. There is enormous opportunity for the UK if we unlock the infrastructure and the jobs, because then we can export that capability all around the world.

Energy Charter Treaty

Selaine Saxby Excerpts

Tuesday 21st March 2023 Westminster Hall

[Chris Skidmore]

The hon. Lady is absolutely right: the sooner we get out, the sooner we are not under the cosh. However, when it comes to looking at the mitigation circumstances for the 20-year rule, France, Germany, Italy and the Netherlands have all signalled their intention to withdraw from the energy charter treaty. As I will explain later, the EU as a bloc will now potentially decide to withdraw from the energy charter treaty, although it will obviously take time to gather agreement and the UK can therefore lead on making a concerted effort to get all the countries to withdraw. If they do, that potentially creates a mechanism by which some of the disputes are unable to be taken forward in certain areas, such as the wider European area; there could be an opportunity to demonstrate how the overall potential liability can be cut by over 60%.

As the hon. Member for Llanelli (Dame Nia Griffith) has made clear, the risks of the status quo could hold the UK open to future challenge. The status quo cannot continue, because continued membership of the energy charter treaty risks having a chilling effect if Governments back away from new policies in order to avoid being sued—a danger that UN climate experts specifically warned about in the IPCC report. The UK Government have already recognised the problem, with the then Energy Minister, my right hon. Friend the Member for Chelsea and Fulham, saying:

“The UK cannot support an outdated treaty which holds back investment in clean energy and puts British taxpayers at increased risk from costly legal challenges.”

I hope to see the same clarity from the new Department for Energy Security and Net Zero, as well as from the new, beefed-up Department for Business and Trade.

[Selaine Saxby (North Devon) (Con)]

I thank my right hon. Friend for securing today’s debate on such an important topic. Does he agree that the creation of a new Department gives us the opportunity to expedite the decisions that we desperately need to take, particularly in the light of yesterday’s IPCC report and his own excellent report? We have to work towards net zero; otherwise, we will hit “not zero”.

[Chris Skidmore]

Absolutely. The UK has demonstrated continued leadership time and again, and I was the first Energy Minister to sign net zero into law. We became the first G7 country to do so, beating France by one day. We must collaborate, and I am proud that we have now seen a huge number of countries commit to net zero. I think we are the first country globally to ensure that we have a Department for net zero, which must also be welcomed. I thank the Government for demonstrating leadership on this issue, but let us extend that leadership by not just changing the words on a plaque on a wall in a Department; let us ensure that the new Department can boldly show leadership by coming out and demonstrating to other countries that it is willing to act. Then others will follow.

There are now serious moves, both here in the UK and elsewhere across Europe, to leave the energy charter treaty as a matter of political priority. It is clear that any chance of reforming the treaty is over. The modernisation talks proposed last year have failed, because several European countries, including Germany, France, Spain and the Netherlands, have decided to leave the treaty due to reforms not going far enough to bring it in line with the Paris agreement. Even the European Commission, which previously led the modernisation process, has announced plans for a full EU withdrawal from the treaty.

Without support from the UK’s traditional allies in favour of the continuation of the reform process, it will be impossible for the UK to push through reforms on its own against the remaining, less climate-ambitious energy charter treaty countries. The UK’s previous position of supporting modernisation is therefore no longer credible. Instead, the UK needs to reach out to like-minded partner countries, such as Germany, France and the Netherlands, to begin the process of co-leading an orderly withdrawal from the treaty.

In February, a group of experts wrote to the Energy and Net Zero Secretary, calling on the UK to quit the energy charter treaty. Today, 15 Members of Parliament from the all-party parliamentary group for the environment—I see a number of those colleagues in the room, representing four different parties—have written to the Minister for Energy Security and Net Zero, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), to make it clear that withdrawal from the ECT is now the best option for the UK in the future. The letter states that there is now an overwhelming case for taking action to leave the treaty unilaterally, especially given that many European countries have left and the EU as a bloc has publicly announced its withdrawal.

First, the letter makes it clear that

“The ECT is undermining efforts to achieve net zero due to costly legal action from fossil fuel companies, and the so-called “regulatory chill” effect, which causes governments to refrain from adopting climate policies. This view is supported by the Intergovernmental Panel on Climate Change”.

Secondly,

“The ECT makes the UK less attractive for clean energy investments as instead of serving the interest of clean energy and sustainable technology companies, it creates a policy landscape that is tilted against clean energy, and which exposes UK finances to huge litigation risk.”

Thirdly,

“The Treaty modernisation process has failed, with major signatories like Italy, Germany, and France preferring to leave the Treaty.”

And fourthly,

“The UK can regain control by co-leading a coordinated Treaty exit by working with like-minded partners such as Germany and France. This would help put the UK at the centre of decision-making on the next phase of ECT discussions, rather than waiting for an EU-led strategy to re-emerge.”

Not only is the letter signed by Members from across the House, but the wider principle of leaving the energy charter treaty is backed by climate and clean energy non-governmental organisations. I have already mentioned a number of them, including the Green Alliance, Global Justice Now and ClientEarth. There is also the Aldersgate Group, chaired by the former Prime Minister, my right hon. Friend the Member for Maidenhead (Mrs May).

As the former Energy Minister who signed the UK’s legal commitment to achieve net zero by 2050 into law, I know too well the challenges that the Minister faces, having sat in his position in the past. Politics has always been about priorities, and no doubt he will be told that there are other priorities that the Government must face. Some will seek to delay; others will claim that it is just too difficult. It was no different when I was seeking to persuade other Departments to agree to net zero. History judges us all on the priorities that we make and the future that we seek to create. Sometimes that future is unknown and unknowable, but that should not prevent us from taking action now to achieve it.

If someone had told me back in 2019 that 90% of the world’s GDP would have signed up to a net zero target just three years on, I simply would not have believed it. Change comes at us fast sometimes, and there is no faster change than climate change. I know of no one serious about achieving net zero who would back the UK’s remaining in the energy charter treaty. Indeed, the reality is that continued membership of the ECT and continued commitment to net zero are not compatible. We face a choice between defending our fossil fuel commitments of the past or delivering our net zero commitments for the future. Our continued membership of the energy charter treaty is not only unsustainable, but simply indefensible. The time has come to pick a side. I urge the Minister to choose net zero and commit to the UK’s withdrawal from the energy charter treaty.

Oral Answers to Questions

Selaine Saxby Excerpts

Tuesday 28th February 2023 Commons Chamber

[Andrew Bowie]

I am afraid the hon. Gentleman has not been listening to what we have been saying for the past hour. We are determined to ensure that we move towards net zero in a sensible and measured way, leading the world as we do so while ensuring food security across the country.

[Selaine Saxby (North Devon) (Con)]

Contracts for difference have been successful in driving down the cost of renewable energies. However, industry bodies and developers are warning that the draft strike prices for allocation round 5 are too low. Can my right hon. Friend commit to a review of strike prices to ensure that the allocation round is a success for renewable energy technologies such as floating offshore wind?

[Grant Shapps]

It is worth reminding the House that contracts for difference has been a world-beating way of creating the world’s second, third and fourth largest offshore wind farms. There have been some pressures on the previous round, due to inflation because of the war. We will keep the next round in mind.