Green Energy in the North-west

Steve McCabe Excerpts

Wednesday 23rd June 2021 Westminster Hall

[Steve McCabe (in the Chair)]

I remind hon. Members participating physically and virtually that they must arrive for the start of a debate and remain for the entire debate. Members participating virtually must leave their camera on for the duration of a debate, so that they are visible at all times both to one another and to us in the Boothroyd Room. If Members attending virtually have any technical problems, please email the Westminster Hall Clerks; the email address is westminsterhallclerks @parliament.uk.

Members attending physically should clean their spaces before they use them and before they leave the room. I remind Members that Mr Speaker has stated that masks should be worn in Westminster Hall. Members attending physically who are in the latter stages of the call list should sit in the Public Gallery if they cannot find a seat in the horseshoe. Members may speak only from the horseshoe where there are microphones. Members not on the call list may intervene from the horseshoe but should not take the place of someone on the call list, as they have priority. After Mick Whitley has made his speech, I will impose a four-and-a-half minute time limit on speeches.

[Mick Whitley (Birkenhead) (Lab) [V]]

I beg to move,

That this House has considered green energy in the North West.

It is a great pleasure to serve under your chairmanship, Mr McCabe. I am immensely grateful to hon. Members for participating in this important debate. I thank the Minister for joining us and the shadow Minister, my hon. Friend the Member for Southampton, Test (Dr Whitehead). I am aware of his decades-long interest in this issue, and warmly welcome the depth of knowledge and experience that he brings to the debate.

I secured this debate because I believe that by pioneering a just transition away from fossil fuels, we have the potential not only to curb the very worst excesses of climate meltdown but to breathe new life into left-behind towns such as my constituency. Massive investment in renewable energies, low-carbon hydrogen and the retrofitting of homes has the power to create hundreds of thousands of jobs nationwide. That will bring badly needed investment to communities that have been ignored by Westminster for far too long. That could restore hope to young people with the offer of all-energy apprenticeships, a range of vocational training opportunities and, above all, dignified and well-paid jobs.

The north-west is perfectly placed to lead the transition to a renewable and low-carbon energy source. After all, our region was the cradle of the first industrial revolution. Our factories, foundries and shipyards gave birth to the industrialised world and, with it, today’s climate crisis. To paraphrase the Mayor of Greater Manchester, it is fitting that the north-west should once again be in the vanguard of a new industrial revolution—this time, a clean one. We already have all the key building blocks needed for this historic transition, from a highly developed renewables sector to world-leading carbon capture and storage capacities, our fantastic knowledge and economy and, most importantly, communities and leaders committed to tackling the climate emergency head-on.

My worry is that the Government’s decarbonisation strategy lacks the ambition and vision to deliver climate or economic justice for the people of the north-west. Analysis from Carbon Brief suggests that that 10-point plan unveiled last year would deliver just 80% of the cuts to carbon emissions required to meet the fourth and fifth carbon budgets. The Industrial Strategy Council has described the plan as

“not yet a…roadmap for delivering Net Zero.”

I am concerned that the Government’s sequential approach to creating low-carbon clusters risks leaving the north-west behind. We desperately need a coherent national strategy for green investment that could benefit all the UK’s regions and nations. We must be far more ambitious, not just in the speed and scale of decarbonisation but by recognising the huge potential for creating jobs. The needs of communities such as Birkenhead must sit at the heart of our decarbonisation plans. That is not to say that I disagree with the Government’s proposals in their entirety. The plan is right to recognise the vital role that blue and green hydrogen can play in helping to meet net zero goals, especially in the hard-to-reach sectors of the economy such as steel, international shipping and aviation.

Low-carbon hydrogen does not just have a role to play in delivering a greener, cleaner economy for future generations. It also has the potential to create up to 75,000 jobs within the next 15 years, as well as contributing £18 billion to the British economy. The Offshore Renewable Energy Catapult centre estimates that the UK could earn up to £48 billion a year from hydrogen exports to Europe by 2050. That means that the green industrial revolution and the post-pandemic economic recovery are partners, not enemies.

The Government’s stated ambition of achieving 5 GW of low-carbon hydrogen production capacity by 2030 is welcome, but as a nation we must go further and faster. Last year, Germany pledged €9 billion to the development of low-carbon hydrogen, while France committed €7.2 billion. The UK risks falling far behind our neighbours in Europe.

Already, Merseyside is beginning to benefit from the development of a low-carbon hydrogen economy. Thanks to the hard work of the metro Mayor, Steve Rotheram, and the head of low carbon, Mark Knowles, Liverpool has become the first city in the north of England to trial hydrogen buses, with the St Helens BOC plant acting as a new refuelling facility. Meanwhile, INEOS Runcorn is helping to make the north-west a centre of green hydrogen production. It is a member of both the North West Hydrogen Alliance and Net Zero North West.

Low-carbon hydrogen can help to decarbonise our homes and offices. That is why I am a strong supporter of HyNet North West, which is attempting to develop a low-carbon hydrogen network stretching from north Wales across the Dee to Liverpool, Greater Manchester and Lancashire. HyNet estimates that it will be able to deliver 35% of the UK’s gigawatt hydrogen target by 2025 and will deliver enough carbon capture and storage capacity for 10 million tonnes of carbon dioxide by 2030. It is estimated that that project could create 6,000 permanent jobs and contribute about £17 billion of gross value added to the regional economy by 2050.

The Government should be doing more to encourage hydrogen as a domestic heating source. That begins by encouraging demand by phasing out the sale of natural gas boilers in much the same way as they are ending the sale of ICE—internal combustion engine—vehicles, and it means giving low and middle-income homeowners the financial support that they need to buy low-carbon alternatives such as heat pumps or hydrogen-ready boilers. I ask the Minister to give serious consideration to the proposals that HyNet submitted to the green recovery challenge fund, to accelerate mains replacement in Merseyside and Greater Manchester. With an additional £250 million of funding, HyNet could deliver a hydrogen-ready network about five years ahead of the current programme.

The advent of green hydrogen and electric vehicles will double UK electricity consumption by 2050. The question of how we meet that increased demand is pivotal. In recent years, offshore wind has undoubtedly been renewable energy’s greatest success story, producing more and more clean electricity every year. In the north-west, a gigawatt of capacity has already been installed. That is enough to meet the needs of more than 1 million households. The Burbo Bank wind farm in Liverpool bay alone produces enough electricity to power 80,000 homes, and its continued expansion is likely to bring increased work and investment to towns such as mine.

We should celebrate the amazing advances in offshore wind capabilities, but we should be careful that the industry’s successes are not allowed to blow away other forms of renewable energy, which may be essential to meeting the soaring demand for clean electricity in the coming decades. I am concerned that the lion’s share of contract for difference funding is going to offshore wind, with other industries missing out.

The Government are doing too little to cultivate the development of wave and tidal power. It is estimated that half of Europe’s wave and tidal power resources are in the UK. With the potential to meet a fifth of UK electricity demand and create 16,000 British jobs, and with 80% of the specialist supply chain located in the UK, investments in tidal power have the potential to create jobs across the engineering and manufacturing sectors. In Merseyside, the proposed Mersey tidal project could generate four times more electricity than the entire offshore wind capacity in Liverpool bay. That is enough to power 1 million homes, as well as creating work on both sides of the river.

Despite that enormous potential, there is not a single mention of tidal power in the 10-point plan. The 2020 energy White Paper stated merely that the Government would consider the role of tidal power in helping us meet the net zero objectives. That is simply not good enough.

I appreciate that the up-front costs of such a project are immense, but they are well worth it. I also recognise that we must give serious consideration to the ecological impact of such developments. We need to tackle the climate and biodiversity crises in tandem—clean energy cannot come at the expense of vulnerable natural habitats—but I agree with the Environmental Audit Committee that many benefits of tidal power, including its predictable and reliable energy output, more than justify the initial expense.

As someone who spent 27 on the shop floor of a Vauxhall car plant, it would be remiss of me not to mention the car industry. The electric vehicle revolution has the potential to revitalise an industry that has been devastated by the pandemic, but only with the unequivocal backing of Westminster. The Government must be far more ambitious in their vision for British car making, beginning with a commitment to the construction of three more gigafactories, to be in operation by 2025. I am sure my hon. Friends from Merseyside and Cheshire will join me in saying that the first of those should be in Ellesmere Port.

I look forward to the contributions of all hon. Members. I am aware that time is short, so I will conclude my remarks. The scale of the crisis we face demands a total transformation of our energy system. That will have profound implications for every part of our lives, from how we heat our homes to how we travel and power our economy. I am sure that that will be reflected in a diversity of contributions. Although I believe we should be honest about the scale of the challenge we face, we should equally embrace the enormous opportunities that a just transition to green energy affords us and our communities.

[Steve McCabe (in the Chair)]

We will have a four-and-a-half minute time limit from now.

--- Later in debate ---

[Margaret Greenwood (Wirral West) (Lab) [V]]

It is a pleasure to serve under your chairmanship, Mr McCabe. I congratulate my hon. Friend the Member for Birkenhead (Mick Whitley) on securing this very important debate. We are facing a climate emergency and I pay tribute to the innovative work being done by scientists, engineers and architects across the north-west to address the challenge. Work like that of architect—[Interruption.]

[Steve McCabe (in the Chair)]

Order. Margaret Greenwood, I am sorry to interrupt. A Division bell is ringing in Westminster Hall at the moment, which means we are not hearing you at all. I understand that everyone here is proxied, so no one needs to leave. If you want to wait a moment until this stops, and start a little bit back, we can pick up your speech—because you are not getting a fair deal here.

Right, Ms Greenwood; I am terribly sorry about that. I sometimes forget how much I love this place. If you would like to go a few sentences back and pick up, I think that would be the fairest way to proceed.

[Margaret Greenwood]

Thank you very much, McCabe. The architect Colin Usher, who has built himself an award-winning home in West Kirby, said that it uses heat pumps, solar panels and exceptional insulation. As a result, it cost him and his wife just £15 a year for heating, lighting, cooking and hot water when the house was completed around six years ago.

The Energy Saving Trust has said that, for the UK to reach its net zero targets, we need to roll out heat pumps at pace and scale, yet the Government scrapped the green homes grant just over six months after its launch. More than 20 organisations, representing builders and construction businesses, energy companies and civil society groups, have called for households on low incomes to be supplied with free heat pumps in order to kickstart the market for low-carbon heating equipment and meet the UK’s climate targets, in a proposal that addresses both the climate emergency and the issue of fuel poverty. Can the Minister set out her response to that proposal?

My right hon. Friend the Member for Doncaster North (Edward Miliband) has recently called for an electric vehicle revolution in every part of the country, in order to boost the car manufacturing industry and create jobs. Here in the north-west, that strategy is urgently needed. The electrification of the automotive industry is of great importance, as the north-west is home to many key automotive factories—including the Vauxhall plant in Ellesmere Port, where a number of my constituents work. For them, it has been an uncertain time, with the chief executive of Stellantis saying earlier this year that it was

“considering the closure of its Ellesmere Port factory unless the UK government offers financial support after extended negotiations.”

Last month, however, it was reported that recent discussions between Stellantis and the Government have been extremely positive and productive. Can the Minister give us an update on those discussions? Will she back Labour’s call to kickstart in this Parliament the development of three additional giga-factories to produce the batteries for electric vehicles? Will she accelerate the creation of charging points, particularly in north-west England, and will she pledge to make electric vehicle ownership affordable for people on lower incomes?

I pay tribute to the metro Mayor of the Liverpool city region, Steve Rotheram, for the work he is doing to address the challenges of climate change. The Mersey Tidal Commission has been established to look into ways of harnessing the power of the River Mersey as a source of clean, renewable and predictable energy for generations to come. It is estimated that a tidal barrage on the Mersey could generate enough electricity to power up to 1 million homes across the region, creating thousands of local jobs.

In March this year, the Environmental Audit Committee wrote to the Secretary of State for Business, Energy and Industrial Strategy to say that there is “substantial potential” for the tidal sector to make a “significant and distinct contribution” to the UK’s future mix of energy generated from renewable sources. It is therefore disappointing that the Government’s support for tidal energy has been only lukewarm up to now. Will the Minister personally take up this issue and give Liverpool city region the support that it needs?

--- Later in debate ---

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair, Mr McCabe. I thank my hon. Friend the Member for Birkenhead (Mick Whitley) for securing this debate and for the excellent points in his introductory comments. As he said, he has a long, proud association with Ellesmere Port through his time at Vauxhall Motors; that company, with many others, is synonymous with my town. It is vital for their future prosperity that we get this right. They all impact the local economy and they also use huge amounts of energy, contributing about 5% of total energy usage in the UK. Faced with that fact, companies are not oblivious to the need to change and have been working together on a whole series of projects that will contribute to reaching net zero and enhance our local economy at the same time. [Interruption.]

[Steve McCabe (in the Chair)]

Order. The Division bell is ringing again. I think we will do the same thing as before and stop until it finishes.

[Justin Madders]

Several Members have talked already about the HyNet North West project, which is vital for the future of industry, not just in my constituency but in the whole sub-region, if it is to meet the challenges of decarbonisation and increased energy costs.

In our area, we are fortunate enough to have an unbeatable combination of industry and geology, which means we can transition to a hydrogen-based economy faster than anyone else. Our current infrastructure can be easily converted to operate with hydrogen. HyNet believes that, as a result, it can capture up to 800,000 tonnes of carbon dioxide every year. As we have heard from various Members already, there is cross-party and indeed cross-border support for HyNet; I refer not just to the border between England and Scotland, but to the equally important border between Cheshire and Merseyside.

It is vital that we get this transition right. Let me give one example of what that can mean. In my constituency, CF Fertilisers employs hundreds of people and supplies about 40% of the UK fertiliser market. It is also the front end of key supply chains for the production of products such as building insulation, Perspex products for car manufacturing, and key bathroom products such as sinks and baths, as well as respiratory medications, so moving to hydrogen will play a huge role in greening large parts of other sectors, too. There is a brighter future down the road, but to get to that point gas prices and emission costs need to remain affordable for companies such as CF Fertilisers over the next five years. They need as much certainty as can be offered by Government. We do not want winners and losers in different parts of the country to be played off against one another. We need to recognise the particular challenges that ammonia producers have. If the Minister needs further details, I am happy to provide them after the debate.

To reiterate a point made by several Members, it is critical to our part of the world that we get the green light to go ahead in phase 1. CF Fertilisers is just one of many businesses where lots of jobs are at risk if we do not get a sustained and consistent approach from Government. There is no doubt that the ambition in my area is there. The question is: will it be matched by Government? Germany is investing 10 times the amount that we are in its quest to deliver the same amount of hydrogen by 2030 that we hope to produce, so we really cannot afford to effect this transition by half-measures. For people’s livelihoods, for the thousands of jobs that it would create and for the future of the planet, we need this transition to be full steam ahead, if colleagues will pardon the pun.

The concept of a just transition is not only realistic but essential if we are to achieve the aims that I think we all want to achieve. When I walk around my constituency in 10 years’ time, I want to see people going about their daily business in electric vehicles that have been manufactured in Ellesmere Port, powered by batteries that have been made locally, driving into secure, well-paid jobs that they can raise a family on in a manufacturing industry that is enjoying a renaissance thanks to the advances we have made in carbon capture and hydrogen. I want us to be living in a time when emissions have gone down but wealth has gone up. That is the future I want. I hope that the Government share our vision and will work with us to make it a reality.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

We are indeed in strange times: those of us who have been in the House for quite a long time have a Pavlovian reaction every time the bell goes off—we jump up and run down the corridor. To resist doing that, and to resist saying anything in the meantime, is a new skill that we need to get used to.

I congratulate my hon. Friend the Member for Birkenhead (Mick Whitley) on having secured this afternoon’s debate. It is a really important debate that sheds light on two things in particular, and he is to be commended for the excellent way he presented the case for renewable energy in the north-west.

First, we must recognise what an important part of the country the north-west is, in terms of both its renewable resources and their utilisation for the benefit of the country as a whole. Some of those resources have been mentioned in the time permitted to us this afternoon. A number of hon. Members, including my hon. Friend the Member for Wirral West (Margaret Greenwood), spoke about the tremendous tidal resource in the north-west. Not many people know that the tidal range in the Mersey estuary is the second highest in the UK, closely followed by the Morecambe Bay tidal range. Parts of the north-west should be in the driving seat when it comes to utilising tidal energy for the future benefit of the UK. Of course, we already have substantial penetration of offshore wind in the Irish sea and a number of installations close to the north-west coastline, but anyone who has seen the offshore wind projects timeline charts put out by RenewableUK will know that, despite the tremendous offshore wind resource in the north-west, development of offshore wind has essentially stalled in that area. The hon. Member for Vale of Clwyd (Dr Davies) mentioned that some new leases are under way, particularly for floating wind, but performance at the moment is, frankly, very poor when it comes to developing this tremendous asset that the north-west has.

We have also heard from hon. Members not just about the north-west’s physical assets, but its human assets, including the assets of ingenuity and thought that have gone into the HyNet project. I unequivocally commend that scheme to this House for its proactive imagination, its importance, and its ability to bring jobs and skill chains to the north-west, which will benefit the north-west and the country as a whole. It combines carbon capture and storage and hydrogen and brings forward industrial processes, and the developers of that project are to be applauded—[Interruption.]

[Steve McCabe (in the Chair)]

Order. I am conscious that I cannot alter the finishing time, which is still 5.50. I am really sorry about this, Dr Whitehead.

[Dr Whitehead]

I will shout my way through it, Mr McCabe. I am trying to draw our attention this afternoon to the north-west’s rich renewable resources that the north-west has, and how imperative it is that those resources be exploited for the benefit of the whole country as soon as possible. Hon. Members have underlined why that is so important.

The second important point to discuss is what the Government are doing about exploiting the resources and supporting the people, local councils and industries of the north-west in getting those schemes under way. The marks are pretty low here. I mentioned the lack of development of offshore wind, and my hon. Friend the hon. Member for Wirral West said Government support for tidal power was lukewarm. That was extremely kind of her, because as far as I am concerned, Government support has been stone cold. That needs to be urgently reversed, in order to bring the resources for secure, stable, low carbon energy forward in the way we know is possible, in Morecambe, the Mersey and other sites in the north-west, to the benefit of the whole country.

[Steve McCabe (in the Chair)]

Order. I think you will have to wind up there, Dr Whitehead.

[Dr Whitehead]

I was about to, Mr McCabe.

[Steve McCabe (in the Chair)]

Now would be good.

[Dr Whitehead]

It is important to put the two parts of the debate together—what the potential is, and what the Government are doing about it. Those two things need to be in close harness. If the result of this debate is better Government support for renewables in the north-west, that would be a very good achievement indeed.