Green Energy: Ports

Stephen Crabb Excerpts

Wednesday 18th October 2023 Westminster Hall

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I beg to move,

That this House has considered ports and green energy.

It is a pleasure to serve under your chairmanship, Mrs Cummins—for the first time, I believe. I look forward to the next 90 minutes. I almost thought I saw the Minister cursing under his breath as he sat down for yet another debate; I keep dragging him back here to talk about issues that are close to my heart and to the interests of my constituency in Pembrokeshire. I am grateful to have secured time for this debate.

This is an important topic, for a couple of reasons. First, quite simply, without a thriving port sector attracting the necessary new infrastructure investment, I do not believe that we will be able to meet the ambitious targets that we have set to protect our energy security and renew our energy system as we work towards net zero. Secondly, a new generation of investment in our ports, based around a long-term vision for renewable energy, has the potential to make a significant contribution to addressing some of the economic inequalities and deprivation that we see in too many of our port communities.

I believe that ports can be an engine for local economic renewal and the key to a new energy future for the whole United Kingdom. That is the essential message that I hope to convey in my short remarks this afternoon. The key question I want to pose is this: what are the steps, decisions and interventions that His Majesty’s Government can take to support and shape this new future for our ports, while recognising that it is the private sector investors and developers who will ultimately need to make that vision a reality?

Nowhere is that more clearly in focus than in my constituency of Preseli Pembrokeshire. The port of Milford Haven is the UK’s most important energy port, hosting major oil refining and petroleum import and export terminals, two liquefied natural gas import and regasification terminals, and one of the UK’s largest and most efficient gas-fired power stations. The port looks forward to a future in which offshore wind and hydrogen will play a central role as our energy system changes. I will make some specific remarks later about the situation at Milford Haven in the context of its relationship with Port Talbot; together, those two south Wales ports form the Celtic Freeport enterprise. I am sure that the points I make will come as no surprise to the Minister, because he has been generous in giving me lots of time over the past year or two to talk about the vision that is emerging there. He has been extremely helpful in his work to take that forward.

As we are an island nation, it seems almost trite and blindingly obvious to say that ports are an essential part of our economy as gateways for vital imports and valuable exports. However, I do not think that that point is appreciated enough, partly because while some ports have flourished in recent times, others have not. In too many of our port communities, there is a sense that they are no longer quite as central to our economic life as they once were when the structure of the UK economy looked very different. Many ports have seen a steep decline in trade and industrial activity without seeing new industries and sectors emerging to fully plug the gap.

I believe that the green energy revolution offers a turning point for many of our ports. There is a broad consensus shared across the Government, the Opposition and large swathes of industry about the increasing importance of renewable energy in our energy mix and about the need for less reliance on imported hydrocarbons. With the impact of climate change brought increasingly into focus following the supply and price impacts of the war in Ukraine, we can see the net zero and energy security agendas coming together in a very potent way. The need to deliver home-grown, affordable and sustainable energy has never been greater. Our ports are right at the heart of meeting that challenge.

It is worth saying that Britain does not exist in isolation when it comes to this agenda. Across Europe, North America and indeed the whole world, many other countries are looking at this—just look at the efforts being made by major ports across Europe to get ready by upgrading their infrastructure to enable a big increase in renewable energy. We can see that at Bilbao, Brest, Rotterdam and other locations across Europe. We are in an internationally competitive environment. One point that I want to leave with the Minister today is that, for all the ambition we have and the vision that we have set out and are pursuing, we need to recognise that others are doing so as well. Given the competition for investment and capital, often from large global companies, we need to be getting our skates on and making good progress.

Ports have a major role to play in delivering on the renewable energy vision, and not just as transit points or entry and exit points for materials; they also have the potential to be hubs for manufacturing, energy generation, operations, maintenance and servicing. Just as in another era our ports acted as cradles of the industrial revolution, I think they can be cradles of a new green industrial revolution, based on the vision that I have been outlining.

[Tim Loughton (East Worthing and Shoreham) (Con)]

I congratulate my right hon. Friend on securing this debate, to which I have come purely so that I can hijack it by singing the virtues of Shoreham harbour, the closest cross-channel harbour to London. He mentioned green hubs, and I absolutely agree with his comments about flexibility and the renaissance in our ports.

Shoreham harbour has put solar panels on its sheds. It has wind turbines. It helps to service the Rampion wind farm just offshore, which will expand to power more than 1.2 million homes across Sussex. It is becoming a hydrogen hub, working with Ricardo engineering, which retrofits engines to be run on hydrogen. Shoreham wants to produce its own hydrogen as well as importing it, and it will be an important centre for net zero through the Sussex bay kelp project, where carbon capture by seaweed is even greater than by trees. Is Shoreham not a great example of flexibility, adaptability and the huge potential of the green revolution, which can also apply to the whole United Kingdom?

[Stephen Crabb]

I am grateful for the very concise way in which my hon. Friend has sung the virtues of his local port. He draws attention to an extremely important point. Very rarely are we talking about individual technologies in isolation; often they come together as a mix. There are so many synergies from different companies working together, as we can see at so many ports around the United Kingdom. It is really encouraging to see so many colleagues in the Chamber from so many different parts of the United Kingdom, hopefully looking to share in the vision that we are talking about.

[David Duguid (Banff and Buchan) (Con)]

On the subject of ports, I should not let the moment pass without mentioning Peterhead and the nearby St Fergus gas terminal. As my right hon. Friend will know, it is the site of the Acorn carbon capture and storage project, which, when completed, will have import capability that perhaps exporters of carbon dioxide from his constituency will take advantage of.

[Stephen Crabb]

I am grateful for my hon. Friend’s intervention. Banff and Buchan is a constituency with which I am very familiar, as he knows, and there are some exciting things happening. For a long time the north-east of Scotland was associated with fishing and oil, but there is a lot more to talk about now, so I look forward to hearing further contributions from him this afternoon.

To encourage the investment required for all the ports that we have an interest in and are talking about this afternoon, the targets that the Government are setting are really important because they set the level of ambition and send a signal to investors in the marketplace about what the Government want.

There are two documents that are particularly important in describing the opportunities flowing from the new energy environment that we are in. One is the energy security strategy published in April last year; the other, which was published in March this year, is “Powering Up Britain”, which speaks to the role of new renewable technologies in our energy mix and outlines the scale of the ambition. Because of my local port and our proximity to the Celtic sea, I have a particular interest in the Government’s ambitions for floating offshore wind. In those two Government documents, I believe there lies a major new industrial opportunity for our nation.

The targets that have been set include 5 GW of floating offshore wind, 10 GW of low-carbon hydrogen production capacity, up to 70 GW of new solar, and an ambition for between 20 million and 30 million tonnes per annum of carbon storage. That is an exciting and ambitious set of targets that the Government are setting out. Meeting them will require a lot of work and a lot of investment, and ports will be right at the centre of it.

Different ports will undoubtedly offer different capabilities according to size, location, local skills mix and local supply chains. It is too easy to say that there will be something for everyone, but if the floating offshore wind sector in the Celtic sea plays anything like the role that the Government are setting out for it in “Powering Up Britain”, it will generate new activity in multiple port locations across south Wales and south-west England.

But let us not get ahead of ourselves. The truth is that we still do not have any floating offshore wind projects up and running in the Celtic sea. That leads me on to the final section of my speech, in which I will outline the significance of what we have in my constituency at Milford Haven, as well as summarising the key asks that I want to put to the Government.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I feel this is an appropriate juncture to intervene. My right hon. Friend will be aware of the importance of Felixstowe port in Suffolk, which has almost 50% of the UK’s container trade. Through strategic investment, there is a great opportunity for the Government not only to support the economic growth of ports, but to support them in delivering the decarbonising agenda. In the case of Felixstowe, investment in the Ely junction will make a significant difference by potentially improving freight rail capacity to the port. Will my right hon. Friend join me in urging the Minister to recommit today to the Government securing timely funding for upgrading that junction and others in the east of England? That will allow improved freight transport to Felixstowe, will help to decarbonise the transport of goods to the port and will improve its economic capacity.

[Stephen Crabb]

I am grateful for that intervention. I am not familiar with the specifics of what my hon. Friend is talking about, but as I am generally in favour of upgrading junctions, I will echo his call to the Minister to support the investment required. His point about decarbonisation is really important; I might say a few words myself about decarbonisation in the context of the local energy industry in Milford Haven.

In the port of Milford Haven, we have the UK’s single largest cluster of energy-related businesses, with high-capacity oil and gas pipelines, electricity connections and a wide range of conventional oil and gas companies, as I referred to earlier. The energy sector in Pembrokeshire supports the employment of 5,000 skilled workers across Wales and the employment of many hundreds more throughout the wider supply chain.

Last week, alongside representatives of many companies at the port, I had the pleasure of celebrating the delivery of the 1,000th cargo of liquefied natural gas at the South Hook LNG terminal. This afternoon we are talking about the green energy revolution, but the truth—this is a point that the Minister understands very well—is that we will rely on oil and gas for decades to come, and the terminals in my constituency that have done a lot of the heavy lifting in the last couple of years in enhancing UK energy security will be as vital as ever. Those conventional energy companies are themselves taking huge strides and making big investments to decarbonise, reduce their own carbon footprint and fit in with the framework of policy and ambition that the Government have set out.

I commend those companies—South Hook LNG, Dragon LNG, the Valero oil refinery, the Puma oil import terminal—which are all part of a cluster around the Milford Haven waterway that is sharing best practice and working together. They are part of the wider south Wales industrial cluster, which has been charged by the Government with the mission of leading decarbonisation efforts. I look forward to hearing the remarks of my friend the hon. Member for Aberavon (Stephen Kinnock). The south Wales corridor—from Milford Haven in the west with its big hydrocarbon plants, through to Port Talbot with the enormous Tata steelworks, and then to Newport and the border of England at Gwent—accounts for a major chunk of Wales’s overall carbon emissions, so the south Wales industrial cluster’s efforts to decarbonise are vital. The Government support them, but it would be good for Ministers to engage even more with the cluster and particularly, from my point of view, with the energy cluster in Pembrokeshire.

In October last year, I led a debate in Westminster Hall about floating offshore wind. I will not repeat everything I said about the new industrial opportunity for Wales and south-west England that lies in the Celtic sea, but I underline the point that this is not some piece of green idealism. The Government’s targets for reaching net zero and ensuring a greater degree of energy security require industrial development in the Celtic sea on a very large scale. Milford Haven is in an ideal geographic location for the Celtic sea developments.

Milford Haven also has more than 50 years of energy industry skills and heritage. Many companies in the local supply chain are well able to adapt and are excited about the potential new opportunities from floating offshore wind. More than 20 companies have expressed an interest as potential developers in floating offshore wind projects in the Celtic sea, including large companies such as RWE and Equinor, which have global footprints and are already investing in Pembrokeshire ahead of the opening up of the Celtic sea. Other companies such as Floventis are already working with local schools and colleges to look at what kind of skills will be required and to excite young people about the green energy revolution. We will need many more people going into technical trades—more welders, pipe fitters, marine engineers, navigators and people who can work offshore—as well as project planners and all the other highly skilled jobs that are required to deliver such projects. It is an exciting time down in Milford Haven.

Let me wrap up by summarising a few asks of the Government. The first—the Minister has heard me ask this before, but I will ask it again—is that it would be great if he could visit Milford Haven, sit down with some of the companies that I am talking about, and get a sense of the excitement and the work that is happening. The previous Secretary of State made a fleeting visit in the middle of August to RWE’s net zero centre at its power station in Pembroke, but we need the Minister to engage with the whole sector. He has previously committed to coming down. Transport to west Wales is appalling—the Welsh Government need to pull their finger out when it comes to running train services, but that is a debate for another day—so it is difficult to get to. There are so many good Scottish colleagues present, so I will make the point that, given the number of visits that Scottish constituencies get, it would be great if Wales could have some of that as well. That is my first ask: come to Pembrokeshire and see what is happening.

Secondly, the bidding process for the floating offshore wind manufacturing investment scheme closed recently. I have written to the Secretary of State, copying in the Treasury. I strongly support Milford Haven’s application for FLOWMIS funding. I have made this point previously, and I will make it again this afternoon: if this fund is to help unlock strategic investment in port infrastructure, it has to be used in a targeted way. I love levelling-up funds—I love the way they are used and spread around—but this is not a levelling-up fund. It has to be used to encourage private developers to release their funding, to incentivise and to send a market signal. I encourage the use of that money. There is £160 million. It should be more, and hopefully it could be more. I would like to see Milford Haven and the port of Port Talbot in south Wales get their asks. Investment is needed in both locations. Everyone who is considering the industry of floating offshore wind in the Celtic sea will agree that Milford Haven and Port Talbot are the two western-facing ports in the Celtic sea where this will happen first.

Thirdly, we appreciate the support that the UK Government have given to establishing the Celtic freeport. I am delighted that Milford Haven, and Port Talbot 70 miles away, have a twinned arrangement and are partners in the Celtic freeport enterprise. A lot of work remains to be done on the governance and on getting the freeport up and running and doing its thing. I ask the Minister to show a real interest in that and to meet representatives of the Celtic freeport to capture their vision of how they want to use that to incentivise investment, particularly in supply chains, so that floating offshore wind does not happen in the same way as fixed-bottom offshore wind, where we ended up relying on companies based and doing work overseas. We want much more of the work for this new industry to be based in and close to our constituencies in south Wales.

My fourth ask of the Minister is on working with the Crown Estate, which I know he already does. If the Minister looks at what the Crown Estate has said ahead of its next leasing round, he will see that it is emphasising the importance of developers working with what they describe as integration ports. These are the ports where the kit is going to be assembled, and these are enormous pieces of kit. I take my hat off to Dan Labbad and his team, who are doing a very good job, but it is important that the plan that the Crown Estate is working on aligns with what the UK Government are doing. That aligned leadership is going to be important if we are going to make those strides and get the industry off the ground.

I was going to make a final point about contracts for difference, but the hon. Member for Strangford (Jim Shannon) will be leading an excellent Westminster Hall debate on that subject tomorrow afternoon, so I will let him make those points. I am sure that he and I think the same about the issue.

I will leave it there. I look forward to hearing from other Members.

[Several hon. Members rose—]

--- Later in debate ---

[Graham Stuart]

I thank the hon. Gentleman for another excellent and well-made point. One of the biggest challenges facing my Department is ensuring that we have the facilitating infrastructure. No matter how interesting the generation is—nuclear, floating, fixed-bed, onshore, offshore—it does not really matter if the electrons cannot get where they need to. That is why we commissioned the Winser review on transmission, and I am really grateful to him for his work. We are going to be reporting back on that as soon as we can. We are working closely with National Grid and others to speed up the extraordinarily long times it takes to put that infrastructure in place. The hon. Member for Aberavon was right to say that if we want to realise our Celtic sea ambitions or our other ambitions around the UK, we need the facilitating infrastructure.

More locally, we are also focused on connections. We will shortly be coming out with a connections plan, because we have queues filled with projects that may never go ahead. We need to find ways to deal with that legally and properly. We now have a dedicated Minister for Nuclear and Networks, precisely because we recognise the challenge. The hon. Member for Aberavon is right to highlight that. We are working flat out on it and it is probably our top priority.

[Stephen Crabb]

On the important issue that the hon. Member for Aberavon (Stephen Kinnock) raised about the grid, is the Minister aware of any specific work by National Grid looking at the grid needs of ports, so that we know which UK ports are going to be energy ports? We can predict where those locations are going to be and we can see activity already happening. Is National Grid doing a piece of work to map the grid requirements of the next 20 to 30 years and put together plans for individual port locations?

[Graham Stuart]

One recommendation of the Winser report was that we pull together a much more coherent overall spatial plan. In previous years, things were done on a fairly linear basis, as we have seen in East Anglia. We have been taking steps through the holistic network design—not necessarily the best title—in phases simply to ensure that we have a more strategic and joined-up approach. We cannot do it project by project; we have to plan the whole thing out. We want to take it from a regional basis to a national basis. Further information will be set out by the Government.

We are working with our European neighbours. I spoke to the German ambassador only this morning about the fact that all of us around the North sea need to think and work together on a common basis. If we do so, we will be better able to realise the huge opportunities in the surrounding seas, do so at the lowest possible cost and maximise European energy security and the jobs and benefits that spring from doing that work.

For floating offshore wind specifically, the industry road map 2040, developed by the floating offshore wind taskforce, identified the need for up to 11 ports across the UK to support the roll-out of commercial-scale floating offshore wind. That is a significant opportunity for the years to come. To support the industry, the Government launched the £160 million floating offshore wind manufacturing investment scheme, which the shadow Minister, the hon. Member for Manchester, Withington, asked about in one of the much more reasonable comments in his speech. We are doing everything we can to bring the timing of that forward and do the assessment, and I hope that we will be able to announce the next stage—due diligence—before the end of this year, but that is tight.

In the coming years, the UK and other countries will exponentially increase their offshore wind deployment in the North sea, the Celtic sea and across a range of new markets. We signed a memorandum of understanding with countries surrounding the North sea in the week before Christmas last year about our rejoining the North Seas Energy Co-operation forum, and we will be having another ministerial next month to ensure that we are working closely together.

We will work with industry, through RenewableUK and the Offshore Wind Industry Council, to assess supply chain needs, which so many colleagues have rightly raised, and to identify the opportunities for the UK to lead and benefit from sustainable growth in the industry, including through building new export opportunities. As a former exports Minister, I recognise that by leaning in ahead as we have done—we have cut our emissions more than any other country on earth—and developing the technologies and solutions, we then have the long-term opportunity to export it. If we can capture more than enough of that energy to meet our own needs, we can export it directly. We could also convert it into green hydrogen, and we can export that. We can also bring in the carbon that will still necessarily be emitted by certain industries and our western European neighbours and put that into the 78 gigatonnes of capacity we have in the North sea. There is so much to be done here, and it can make such a difference: it can bring about the renaissance of industry in the north-east and north-west of England, in Scotland, in Wales and in Northern Ireland, as well as all around the country. It is a very exciting thing.

As I said, ports are not just important for offshore wind. They will also play a key role for carbon capture and storage, supporting the decarbonisation of emitters. Maritime shipping will play a key role, linking emissions captured from the dispersed sites with offshore CO₂ storage sites. Import and export ports across the UK that can handle large volumes of CO₂ will be required to facilitate the transport and storage of CO₂ via ships. We heard about the plans for the Humber and elsewhere, indeed including on the south coast as mentioned in the brilliant, albeit short, speech by my hon. Friend the Member for Southampton, Itchen (Royston Smith).

On hydrogen, the Government recognise that port infrastructure will have a big role to play. We have a target of 10 GW of low-carbon production by 2030. As the hydrogen economy matures and the UK exploits export opportunities, we will need the right port infrastructure to accommodate large transport ships bringing in or taking away hydrogen, and we are determined to seize those opportunities for the UK economy. It is so important that we do not have an Administration who would do the exact opposite—and who have a track record of that.

--- Later in debate ---

[Stephen Crabb]

Thank you, Mrs Cummins, for your excellent chairing. I thank all colleagues who participated in what I thought was a useful, practical and good-natured debate. I always come away from these things having learned quite a lot about what is going on in different parts of the country. Really exciting things linked to renewable energy are happening in so many different port communities around the UK. We hope that that continues to go from strength to strength.

I really appreciated the winding-up remarks of the Minister, who always speaks with intelligence and passion. He really believes in what he talks about, and I know that he is engaged with industry, the Crown Estate and other stakeholders to try to make this vision a reality. I look forward to welcoming him to the port of Milford Haven in a matter of weeks, whenever we can get it arranged. That would be hugely welcome.

Question put and agreed to.

Resolved,

That this House has considered the contribution of ports to green energy.