Energy Bill [Lords]

Wera Hobhouse Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[Grant Shapps]

My right hon. Friend will know that the world’s very first civil nuclear reactor was Calder Hall in Cumbria, and we led the world, but, as he said, we switched off or stopped investing in nuclear power. That was a great shame, because we are now having to work to get back to 25%, which is our objective. He is right in another way as well, because for several decades one company has been responsible for running what are essentially small modular reactors in the nuclear Trident fleet under the water, and successfully refuelling once every 25 years. We have a certain lead in this area, and it is very important that we get on with small modular reactors. That is why we are having a very brief competition, with the results coming by October.

[Wera Hobhouse (Bath) (LD)]

The Secretary of State rightly addresses the need to decarbonise and support industries that have been high users of carbon. The Bill as currently amended includes a ban on opening new coalmines, thanks to the Liberal Democrats in the other place. What possible reason could there be for the Government not to support that?

[Grant Shapps]

Conservative Members believe in getting on and doing things, which is how we have ended up going from nearly 40% of our electricity coming from coal just 10 or 11 years ago to the position this year, when I expect that to drop to about zero. The Liberal Democrats are still fighting the battles of yesterday. They are still concerned about building more power stations for coal, but no one is doing that. The issue is already in the distant past.

--- Later in debate ---

[Wera Hobhouse (Bath) (LD)]

Our biggest task worldwide is to get to net zero. We must transform our entire energy system. The Liberal Democrats welcome many of the Bill’s proposals. However, it is simply not ambitious enough. We need bold action now to protect consumers from spiralling costs and to put us on the path to net zero.

The Government continue to protect the oil and gas giants. Typical direct debit customers have seen their annual gas and electricity bills almost double, while oil and gas giants have announced record profits. Last year, Shell forcibly installed prepayment meters in over 4,000 homes while making £32 billion in profit. UK consumers have been among the least protected in Europe. When will this Government put struggling UK citizens first?

The energy price cap is not fit for purpose. The current price cap is set at a high level to incentivise people to switch energy suppliers, but research shows that vulnerable customers who struggle to pay their energy bills are much less likely to switch suppliers. We Liberal Democrats would reform the price cap to protect these customers by bringing in a capped tariff set lower than the existing price cap. I urge the Government to consider this.

The best way to reduce energy bills is to move harder and faster towards renewables. However, a lack of grid capacity is seriously holding back renewable energy projects. Many face delays of up to 15 years. In Wokingham, for example, the Liberal Democrat council has been told that its first ground-mounted solar farm project will only be connected in October 2037, a decade later than originally promised. How can we decarbonise our power system by 2035 when ready-to-go renewable projects cannot get the grid connection they need?

Britain will have to build seven times more transmission lines in the next seven years than it has built in the last 20. This huge task will require a major change in approach by the regulator. Ofgem is not empowered to consider the benefit of long-term investment, as its remit focuses on short-term costs to consumers. This is a major reason behind the lack of grid investment. In the other place, an amendment was agreed to give Ofgem a specific statutory net zero objective. I urge the Government to keep this provision in place.

The Bill, as amended, also now contains a ban on opening new coalmines. Less than two years ago, the Government announced that they were leading an international effort to end the use of coal, yet soon afterwards they gave the greenlight to the Cumbria coalmine, a gateway to allowing more fossil fuels in the UK and flying in the face of our net zero commitments. The Government must ensure that this ban on new coalmines remains part of the Bill if they are to retain a shred of credibility on climate action. Huge changes to people’s lives will be required to get to net zero. We must bring people on board, or there is a risk that people will not accept the necessary changes, making our progress to net zero more lengthy, costly and contested.

Community energy provides cheaper, greener power and distributes benefits locally. The community energy sector has the potential to be 20 times bigger by 2030, powering 2.2 million homes and saving 2.5 million tonnes of CO₂ every year. However, community energy projects currently generate just 0.5% of the UK’s electricity. This is because the financial, technical and operational requirements involved in becoming a licensed supplier put initial costs at more than £1 million. The amendments agreed in the other place would rectify this, and they must remain part of the Bill. Ministers have said repeatedly that they want more community energy. Now is the time to show that they mean it.

Some 77% of people say that they would support a new onshore wind farm being built in their area. Our UK communities know that renewables are the solution to our energy crisis. However, this Government continue with their dogmatic opposition to onshore wind and solar. The Bill does not contain provisions to roll out solar power, and the effective ban on onshore wind remains.

Another disappointment is that the Bill does not contain provisions to cut flaring, venting and leakage of methane from gas and oil platforms. Methane is a potent greenhouse gas, with 80 times the warming effect of CO₂. It accounts for 13% of global greenhouse gas emissions. The UK has signed the global pledge to cut methane levels by 30%, and a ban on oil and gas flaring and venting in the North sea would dramatically reduce methane emissions. It is supported by the Environmental Audit Committee and the Government-commissioned independent review of net zero. We must mandate monthly leak detection and repair activities. The North Sea Transition Authority must identify and publish a league table of the best and worst performing companies, so that methane emissions can be publicly monitored. We can reduce methane waste by 72%, but the Bill is currently silent about that and needs amending. We still have much to do to protect consumers and reach net zero. The Bill, although substantially improved in the other place, still does not go far enough. As it passes through this House, we must ensure it does not become a missed opportunity.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call David Duguid.

--- Later in debate ---

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

We have had a good, calm and well-informed Second Reading debate. Indeed, we have heard contributions from across the House emphasising the point that the Bill is necessary but not necessarily sufficient.

My right hon. Friend the Member for Leeds Central (Hilary Benn) asked who will pay the changed levies as far as heating is concerned, and spoke about the need to undertake that properly for customers.

My hon. Friend the Member for Llanelli (Dame Nia Griffith) pointed us towards the rise of state-controlled companies’ investment in new energy arrangements, and was adamant about the Bill lifting of the ban on onshore wind.

My hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) made a strong contribution on the role of hydrogen in heating and, in particular, on the hydrogen trials that he has experienced. Perhaps we can assure him that we will certainly pursue an amendment to the Bill along the lines that he suggested.

My hon. Friend the Member for Stockton North (Alex Cunningham) spoke strongly about carbon capture and storage, about the importance of CCS in the Teesside industrial cluster, and about the importance of ensuring that the industrial clusters can play their role in CCS as they develop further,

In the spirit of general cross-party support for the Bill, I think it also worth mentioning selected contributions from hon. Members who are not on the Labour side. Unfortunately, if everyone stuck to the contributions from their own side, those of the hon. Member for Brighton, Pavilion (Caroline Lucas) would not be mentioned by anybody, but she made a strong contribution about the future of coal, about the need to support the amendment on coal tabled in the other place, and about the ludicrousness of continuing to maximise the economic production of oil, echoing many of the sentiments of my right hon. Friend the Member for Doncaster North (Edward Miliband).

The right hon. Member for Ludlow (Philip Dunne), who chairs the Environmental Audit Committee, spoke strongly about the need for security of investment in this market, and the length of arrangement that would secure those investments and confidence in markets for the future.

Finally, the right hon. Member for Kingswood (Chris Skidmore), author of the net zero report, spoke enormous sense about delays being the biggest threat to net zero in future. He supported the retention of Lords amendments to the Bill, as did many other hon. Members, on community energy changes and other things that are part of the Bill that we are debating in the Commons.

[Wera Hobhouse]

Does the hon. Gentleman think that it is important that we do something about methane flaring and venting, which I raised in my contribution?

[Dr Whitehead]

Yes, I am happy to acknowledge that that is an important issue in the transition to net zero for the oil and gas industry, and that it is ripe for further legislation to outlaw it in the not-too-distant future.

It is fair to say that hon. Members across the House went along with the theme that we have tried to establish on the Bill: it contains a great deal to support, and it is a Bill that is necessary to introduce things that are essential to the development of a low-carbon economy, to the achievement of the many targets on low-carbon energy and renewable deployment, and to the new forms of energy management that the Government have already put in place and on which they are seeking to succeed.

The Bill establishes mechanisms and business arrangements for carbon capture and storage, and for the manufacture and deployment of hydrogen as a low-carbon fuel for the future. It starts to delineate how energy systems are going to be governed and managed for the future, with the establishment of the independent system operator. For the first time, it introduces a proper system of heat network regulation, and it takes the planning and development of heat networks further. It heralds some of the essential elements of energy market reform. In short, it undertakes a great deal of what I would call necessary “green plumbing”, which has to be done now if our low-carbon energy system of the future is to work effectively.

The Opposition have some serious differences with the Government about how to go about those changes, but we acknowledge and support the generality of those “green plumbing” measures, not least because their establishment will undoubtedly help the new Labour Government greatly as we embark on our far more ambitious programme of energy decarbonisation and energy efficiency from 2024 onwards. Indeed, one of our substantial criticisms of the Bill is how long it has taken for us to get to the point of establishing the legislation that will guide the next stages of our energy decarbonisation.

As we have heard, the Bill has been with us for 10 months in its almost finalised form. Yes, the Government have sought to add amendments to the Bill in another place, and there will be further amendments in the Commons, but the measure could have been on the statute book many months ago—and time is of the essence in getting going with the next stages of decarbonisation. Instead, last autumn we were treated to the spectacle of the then Secretary of State for Business, Energy and Industrial Strategy pulling the Energy Bill from its established progress after just two sessions of debate, and sitting on it for over three months for no apparent reason while the legislative process stalled completely. That led to the remarkable situation of the Opposition writing to the new Minister during that period of stasis demanding that the Bill be recommenced as soon as possible. I know about that because I was the person who wrote the letter. [Interruption.] Indeed, I did a very good job there.

Yes, this Bill is necessary, but many Members have asked whether it is sufficient, and we think it is certainly not. There are many missed opportunities to legislate for many aspects of the green transition that are or will become necessary shortly. There are many instances where the green plumbing in the Bill looks, frankly, fairly faulty and could do with beefing up. For example, the Bill fails completely to lift onshore wind back into place as a key element of our low-carbon energy armoury. The Bill fails to redefine Ofgem’s remit to start from a low-carbon imperative. The Bill fails to address another key part of that armoury—community energy—in any sort of meaningful and enabling way.

The Bill fails to address the very real changes in regulatory machinery that will need to accompany the transition from oil and gas to a predominantly low-carbon energy environment. The Bill continues to propose soaking customers for the support of future infrastructure when we require entirely new forms of support that recognise both the breadth of the work that has to be done and the institutions that we will need to support investment and development.

There are many areas where we can say, “Yes, but” to this Bill and put forward the measures that will enable it to rise to the challenge of decarbonisation in a comprehensive way. That is why we will embark on that task as the Bill goes into Committee by tabling the amendments that will make the Bill so much more robust for the challenge of the future, and we hope the Government will be receptive to those proposals. That process has been started, with a number of very well-thought-out additions made to the Bill in the other place on Ofgem, hydrogen, coal, community energy and home retrofitting. We will seek to defend those changes in this place, and we hope the Government will see the wisdom of them and not seek to overthrow them.

This is a necessary but not sufficient Bill that we want to get on the statute book, preferably with the added heft of our proposed changes to it in Committee, so that it becomes more on the sufficient end and less just necessary. We will not seek to divide the House on Second Reading but instead will give conditional support and assistance as far as we can with an early emplacement on the statute book.

Labour has an ambitious low-carbon energy programme for government, with a fully decarbonised power system by 2030, including a doubling of present onshore wind deployment; a grid that is fit for enabling and delivering a low-carbon economy; Great British Energy, an investment company that can do so much to speed the energy transition along; a massive programme to retrofit 19 million homes over 10 years to reach our energy efficiency targets; and serious planning of the energy transition, so that it is a just transition both in the North Sea and elsewhere. All these plans will benefit from many of the measures that are in the Bill, but they could be so much more supportive, and that is why we want to see an extended and more robust version of the Bill on the statute book as soon as possible.

Energy Bill [Lords]

Wera Hobhouse Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

[David Duguid]

In the interests of time, I will limit my remarks to carbon capture and storage, and the impact of offshore wind on other commercial activities at sea, specifically fishing. If I have time at the end, I will talk about hydrogen and maybe even the future of oil and gas.

I welcome the announcement on 31 July by the Prime Minister in my constituency confirming the Acorn CCS and hydrogen project; that will mean that four CCUS clusters will be operational by the end of the decade. The Scottish cluster is particularly crucial for my constituency of Banff and Buchan, as well as the whole of Scotland, not just for the estimated 21,000 jobs the project is predicted to support but to enable the construction of a new CCS power station at Peterhead. That power station will replace the existing one, which is currently the only dispatchable thermal power station north of Leeds. It will be critical is providing stable baseload in support of intermittent renewable sources of energy, and will do so in a way that is 95% emission-free.

Again in the interests of time, I am not going to speak about every single amendment that I tabled, but I hope the Minister will bear with me and perhaps respond to the following questions. In respect of clause 2, which deals with licensable activities and their prohibition, can he clarify whether, or why, an economic licence would be required specifically over and above the geological storage licence that would be granted under the existing regulatory regime, namely the Storage of Carbon Dioxide (Licensing etc.) Regulations 2010? Will private operators be able to develop merchant models in competitive transport and/or storage markets in the longer term?

As the Minister will know, the UK has about a third of Europe’s entire offshore carbon dioxide storage potential undersea, roughly equal to that of all the other EU states combined. Only Norway has slightly more than the UK in the North sea. This enormous potential to offer CO2 storage services to European and other countries presents an opportunity for the UK to become a global leader in CCUS, and accelerate the global efforts to prevent CO2 emissions. How will cross-border transport and geological storage of carbon dioxide be enabled to develop in time, without having to rely on the granting of exemptions to allow private networks to develop? Can the Minister also confirm that it will be possible to facilitate transportation by ship, and any other means of transport other than pipeline, through regulation, and that that is covered adequately by clause 128(1)(a)? I see him nodding.

Finally, may I raise the subject of offshore wind? The fishing industry understands that energy security matters, and that offshore wind has an important part to play in the overall energy mix, but food security matters too. The Minister will be aware of studies which have shown that up to half our seas could be lost to fishing owing to other activities, including offshore wind. Academic studies carried out by Heriot-Watt University, among others, have shown the impact that electromagnetic fields from subsea cables have had on the migration, growth and development—including abnormalities—of crabs and lobsters. The Energy Bill already makes provision for the principle of a levy to address the environmental impact of these new wind farms, which is absolutely right and proper, so what consideration—including engagement with devolved Administrations, as required—has been given, or could be given, to the businesses, industries and coastal communities that will inevitably be impacted by offshore wind operations?

Last month, the think-tank Onward published a compelling paper arguing for statutory payments, from developers, to be made to communities where—if and when—onshore wind was developed. If that principle is fair, payments for actual loss of earnings to other marine business from offshore developments are even more compelling as a principle. I am aware of the various voluntary codes and guidance that are available, but they have so far proved to be insufficient. If the Minister is unable to respond to that last question today, will he agree to meet me, and representatives from the fishing industry, to discuss how best to embed a fair and equitable principle in Government action, that would come at no cost to His Majesty’s Treasury?

[Wera Hobhouse (Bath) (LD)]

The UK has a responsibility to deliver an effective net zero strategy. This Energy Bill provided a chance to ensure that the Government’s own climate commitments could be met. Some parts of the Bill are welcome, but as it stands, it presents us with many missed opportunities. The Liberal Democrats fully support the establishment of the independent systems operator, and I am pleased that the Government have finally listened and given Ofgem a net zero duty. However, I am disappointed that the Government removed sensible amendments in Committee, such as the amendment to ban new coalmines, and I strongly support new clause 2.

Let me now focus on the Liberal Democrats’ new clauses 11, 12, 15, 24 and 28. The aim of new clause 28 is to ban fracking permanently. Fracked fuel is a fossil fuel; it hardens our reliance on expensive gas, and it flies in the face of our net zero commitments. The Government’s own experts have said that the seismic activity caused by hydraulic fracking is not safe. It is incomprehensible that the Government ever considered lifting the ban, and it caused huge anxiety among communities across the country. That must never happen again.

Last year, Shell forcibly installed prepayment meters in more than 4,000 homes, while making £32 billion in profits. Those on prepayment meters typically spent about £130 a year more than direct debit customers. Why are so many vulnerable people forced into this? The Government must support my new clause 15 to prohibit the installation of new prepayment meters unless consumers explicitly request them.



Solar is one of the cheapest forms of energy, and again it is incomprehensible that this Government do not give it the support that it deserves. The Climate Change Committee says that UK solar power deployment is significantly behind the Government’s target of 70 GW by 2035. The smart export guarantee should incentivise households to invest in solar panels by allowing them to sell the excess electricity produced back to the grid. However, under the current system it will take householders decades to break even and this will not incentivise solar investment. Our Liberal Democrat new clause 11 aims to enhance the reward under the smart export guarantee.

Energy Bill [Lords]

Wera Hobhouse Excerpts

Consideration of Lords message
Wednesday 18th October 2023 Commons Chamber

A functioning UK Government would embrace this remarkable potential, accept the Lords amendment and seek to enable rather than disable local supply. The regulatory barriers that prevent community energy schemes from selling power to local customers are incongruous with both our climate emergency and the scale of current energy prices. The new £10 million community energy fund is nothing but a paltry smokescreen, which will not scratch the surface and is a veil simply for this Tory Government’s inaction and hostility to the ambition of the people and their drive for net zero. The Government cannot hold a candle to the Scottish Government’s record in this area, but it is high time they at least tried to do so.

[Wera Hobhouse (Bath) (LD)]

Let us remind ourselves what Lords amendment 247B is about. Within 18 months of the Act being passed, the Secretary of State would be required to carry out a consultation and publish a report on the barriers preventing the development of community energy schemes. It would also require the Government to respond and bring forward proposals to remove the barriers preventing the development of community energy schemes within six months of the consultation closing. That is the bare minimum that the Government could do. It would at least move the issue forward, and yet the Government still put forward a motion to disagree with it.

The Government say that they have already committed to consult on the barriers to local supply, but we still have not been given a date when that will actually happen. The Lords amendment would stop the Government’s current policy of dither and delay and require them to get on with taking community energy schemes forward.

Ultimately, the Government should not need to consult, because they are already well aware of what barriers face the sector; Community Energy England has told them repeatedly over the last five years. It is really disappointing, because there is even an all-party parliamentary group for community energy. Officials have engaged with the APPG, yet nothing has happened because the Government, despite warm words, are not really committed to community energy.

In 2021, the Environmental Audit Committee published a series of recommendations to encourage community energy. The only recommendation taken forward so far is the community energy fund, and even that does not yet have a launch date. I hope that the Minister will tell me when the launch date will be. When will we see the fund for community energy?

We are in the middle of an energy crisis. Bills have skyrocketed. Access to cheap, clean, home-produced energy has never been more vital. We need to secure our energy supply, protect consumers and reach net zero. As we have always said in the debate about reaching net zero, we need to take people with us. That is not about delaying targets, as the Government have just done, but about encouraging people to walk the difficult journey to net zero. Community energy does exactly that. Why are the Government not supporting it with all their might? Why are the Government not even supporting the Lords amendment? It is the bare minimum.

Community energy has the potential to power 2.2 million homes and save 2.5 million tonnes of carbon dioxide emissions every year. All it needs is a Government who give it the support that it deserves. I have seen at first hand the benefits that community energy can bring. In my Bath constituency, Bath and West Community Energy has installed enough renewables to power 4,500 homes. It has invested the money that it has earned back into my local community, donating nearly £330,000 to support environmental and fuel poverty schemes. That is what community energy can do. What is there not to support? Why are the Government not committed to doing all that they can to ensure that community energy projects can be delivered?

[John Redwood]

rose—

[Wera Hobhouse]

Unfortunately, the Government are unwilling to see the potential of community energy. Community energy schemes currently generate just 0.5% of the UK’s electricity. That is because—we know all this; we have said it many times—the financial, technical and operational requirements involved in becoming a licensed supplier put initial costs at more than £1 million. That is a massive risk for any new start-up or small scheme. Any community energy projects such as the one in Bath can exist only because it has reached a certain size. That is one of the problems.

The Government are aware of that fact, but voted to remove Lords amendments to rectify it. The Government need to start matching their supportive words about community energy with action. The most effective step that they could take would be to enable local supply and remove the regulatory barriers that prevent community energy schemes from selling their power to local customers. That could include a community right to connect to the grid ahead of commercial projects that deliver little or no social and community benefit. I am sure that I have answered the question that the right hon. Member for Wokingham (John Redwood) was about to ask.

Community energy schemes are ready to provide clean, green energy that helps local communities. They are not asking for a huge amount of public money, just for the Government to stop blocking the system. In this time of energy uncertainty, having a reliable local supplier can only be positive. I fully support Lords amendment 274B to hold the Government’s feet to the fire on community energy. I urge everyone in this House to do the same.

[Andrew Bowie]

I thank all right hon. and hon. Members for contributing to this afternoon’s debate. I will first respond to some of the comments made by my constituency neighbour, the hon. Member for Angus (Dave Doogan). I know that he does not like it very much, and would like it if it were not the case, but he is absolutely wrong and I have to correct him: this is not the English Government; this is the British Government. We are the Government of the entire United Kingdom—a United Kingdom of which Scotland remains a part and, if the opinion polls are anything to go by, will continue to remain a part of for quite some time.

The hon. Member has an obsession with decrying the nuclear industry as something that the Tories alone are obsessed with. Tell that to the Governments of France, Sweden, Finland, Italy, Poland, the Czech Republic, Slovakia, Canada, the United States of America and more, who are reinvesting and restarting their own civil nuclear industry, as is the Labour Welsh Government, who are very much in favour of further investment in, and development of, nuclear. He raised the lack of funding for community energy projects; £10 million over two years is an incredibly generous offer. That is alongside other UK growth funding such as the UK shared prosperity fund, which community energy groups can access by working in partnership with their local authorities.

The hon. Member for Bath (Wera Hobhouse) asked when the community energy fund will be launched. It will be launched as soon as possible. We are aiming to launch applications to the fund as soon as we physically can.

My opposite number, the hon. Member for Southampton, Test (Dr Whitehead), is right that we have had a productive and constructive relationship when it comes to discussion of the Bill. The 72 hours that we spent together in Committee were beneficial to everybody’s health, I am sure, and to the development of Government policy on this matter. We have come some way from where we were when we started discussing how we would support community energy. He rightly praised the role that the sector has played during the passage of the Bill. The community energy sector has been incredibly receptive to our commitment to a consultation and to the £10 million fund.

[Andrew Bowie]

My right hon. Friend is absolutely right. I also noticed that—

[Wera Hobhouse]

Will the Minister give way?

[Andrew Bowie]

Two seconds. I will respond to the first intervention before I give way to the hon. Lady. I also noticed that she managed to answer a question that had not even been asked by my right hon. Friend.

[Wera Hobhouse]

The amendment also says that the Government should respond to the barriers and put forward proposals. That is really what we want to know: what is the response to any consultation? The Government have failed to give any response to that.

[Andrew Bowie]

We cannot respond to a consultation that has not been launched yet. We are in the process right now of working with the community energy contact group. In fact, it has already met. Work is under way right now to develop the consultation, identify what the barriers to market are, and get out there and support the community energy sector, as the Government are determined to do.