Marine Renewables Industry

Wera Hobhouse Excerpts

Thursday 16th January 2025 Westminster Hall

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Diolch yn fawr iawn, Ms Jardine. I welcome you to your first chairmanship role here. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this debate.

With a wind-lashed coastline stretching for a grand total of 1,680 miles, Wales has an abundance of marine energy potential. This growing sector already contributes significant sums to the Welsh economy. Last financial year, the marine renewable energy sector delivered £29.9 million to the Welsh economy, and it currently sustains 429 full-time jobs. We would like the number of jobs to be way more than that, please.

Tidal stream is the largest contributor to the sector at present, and developers are set to deliver 28 MW-worth of development by 2028. That number is expected to grow with each annual auction round. For the future, it is estimated that Wales has the potential to generate up to 6 GW-worth of wave and tidal stream energy.

I have mentioned jobs. Development and installation of 1 GW alone could support 440 full-time jobs during generation—and those in communities that currently suffer deprivation. That is a theme for many Members of Parliament from what might be called the Celtic fringe, but it really matters to us. We have such potential to generate more energy for the United Kingdom in its entirety and to generate energy security, but at the same time this can be a real levelling-up prospect for communities that have suffered in low-wage economies. Particularly in relation to Wales, I could mention Holyhead; I could mention my own community of Dwyfor Meirionnydd; and I could mention Milford Haven. We should plan ahead and look at the futures of those communities, particularly somewhere like Milford Haven, which is so dependent on fossil fuel at present.

Wales is clearly poised to play a leading role in marine renewables. However, the sector is still in the early stages of development and needs Government support so that it can truly flourish. The Welsh Government have recently announced strategic resource areas for tidal stream, and I welcome that. It is a form of marine planning to designate the future availability of these areas for potential tidal stream energy projects. Of course, in Wales, as elsewhere, it is important to work with other key users of the sea, such as fishermen. There are tourism considerations as well.

This includes, just with regard to my own constituency, the sea off the Llŷn peninsula, where Swnt Enlli—Bardsey sound—has some of the strongest tidal races in the Irish sea. Proudly, Nova Innovation had a project there, but sadly, because of the lack of grid capacity, it eventually pulled out. It is exactly these problems with grid capacity that often hinder the bringing of projects to fruition in bringing their energy onshore from the sea.

Now, of course, I turn to Ynys Môn. I am speaking in place of my hon. Friend the Member for Ynys Môn (Llinos Medi), who is glad to be reopening one of the berths at Holyhead. As of today, ferries are again sailing from Holyhead, which is very good news for not just Holyhead and north Wales, but the connections with Ireland. We have existing tidal stream projects there, such as the Morlais project, and we see a potential model that addresses the problem of grid connection, which might be replicated elsewhere.

Morlais came about with major investment from both the European Union and the Welsh Government, with a grid substation already developed and the environmental consents already in place—that is the important point. That provides an offering to tidal stream developers in which there is a reduced cost and risk that mean that they are sure of getting their technology into the water.

[Wera Hobhouse (Bath) (LD)]

I know that the National Energy System Operator has just put forward proposals to Government on how to address the grid queue and how it should be renewed and reviewed. Does the right hon. Lady agree that we need to hear from Government as soon as possible what the reorganisation of the grid queue would mean and which projects would be prioritised?

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[Claire Young (Thornbury and Yate) (LD)]

It is a pleasure to serve under your chairship, Ms Jardine. I congratulate my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) on securing this important debate and on his efforts to keep this issue on the agenda in Parliament. I want to reinforce the point he made about the Crown Estate Commission. As Liberal Democrats, we believe in working with communities to deliver change. The Crown Estate may own the seabed, but that does not mean the commission should be allowed to ignore the needs of others who make their living from the sea, whether through fishing, tourism or any other means. That point was picked up by a number of Members, particularly my hon. Friend the Member for South Devon (Caroline Voaden), who spoke up powerfully for the fishing industry in Brixham. The commission should also not be exempt from the duty to protect nature that other public bodies have, recognising—as we do—that the nature and climate emergencies go hand in hand.

On the wider issue, marine renewables will help us to meet our commitment to tackle the climate crisis—the single biggest challenge facing our generation.

[Wera Hobhouse]

My hon. Friend and I are members of the Energy Security and Net Zero Committee, and yesterday we heard evidence from the Secretary of State. He said that the transition to net zero is the biggest opportunity for all of us, including those in the south-west, to create prosperity and the jobs we need for the future. Does my hon. Friend agree?

[Claire Young]

Absolutely—it is almost as though my hon. Friend has read the next section of my speech. I was about to say that marine renewables will also boost jobs and businesses throughout the supply chain, and will be part of the solution to the energy crisis that has hit people hard in recent years.

Sadly, we are living in the shadow of the Conservatives’ failure to fully invest in renewable energy and to properly insulate our homes. The previous Conservative Government rowed back on their pledges to meet net zero and shamefully watered down policies aimed at reducing our carbon emissions. That means we need bold action now to put us back on the right course. Liberal Democrats want to see this Government step up to the plate and provide a comprehensive energy strategy designed to bring down bills, end fuel poverty, cut greenhouse gas emissions and deliver energy security.

A key part of that strategy must be marine renewable energy. I welcome the initial progress being made, with a 50% uplift in ringfenced funding support for tidal stream energy as part of the contracts for difference renewables auctions. With a significant stretch of the Severn estuary coastline in my constituency, I am keen to see the UK leading the world in tidal power. My hon. Friends the Members for Taunton and Wellington (Gideon Amos) and for Melksham and Devizes (Brian Mathew) highlighted the opportunities in the wider south-west. Given that it is his birthday, I will not argue with my hon. Friend the Member for Taunton and Wellington today about his plans to make Taunton the centre of that enterprise. The 50% uplift is a good first step and shows that we are beginning to take the sector seriously.

However, there is so much more potential out there, if only the Government would reach out and grasp it. My right hon. Friend the Member for Orkney and Shetland mentioned the parallels with the gas and oil industry, and I would like to look at wind power as an example of how these things can be done. When my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) was Secretary of State for Energy and Climate Change, he made it his key priority to back renewables and managed to push through a bold climate agenda that embraced new technologies. That quadrupled the UK’s level of renewable power and made us a world leader in offshore wind energy.

The Office for National Statistics has stated that employment estimates within the low-carbon and renewable energy economy are at record levels. Because of the willingness to back British renewables, the industry is now worth an estimated £69.4 billion to the UK economy and supports thousands of jobs. The economic benefits and the need to make sure they are kept in the UK have been highlighted by many Members, including the hon. Members for Edinburgh North and Leith (Tracy Gilbert), for Truro and Falmouth (Jayne Kirkham) and for Camborne and Redruth (Perran Moon).

It is good to hear about the important partnerships with universities, including Herriot-Watt, mentioned by my right hon. Friend the Member for Orkney and Shetland, and Queen’s University Belfast, mentioned by the hon. Member for Strangford (Jim Shannon).

The Government talk a lot about their drive for economic growth, and I suggest that that goes hand in hand with investing in renewable power generation. Putting a just transition front and centre allows us to not only reskill those already working in the energy industry, but upskill people to give them new opportunities around our coast. Our coastal areas have long felt left behind and forgotten about, as I know from talking to people in places such as Severn Beach in my constituency. Those areas now have the potential to become booming hubs of activity, which is why Liberal Democrats want to see marine renewables used as part of a plan to invest in them, with a dedicated skills fund to provide green skills and jobs to communities.

I would like briefly to pick up the issue of grid connections, which I have mentioned in the House in reference to other renewables and which the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) raised today. A plan to deliver the supporting infrastructure must be part of any strategy.

Britain has long been defined by our connection with the sea that surrounds our island. We have a unique relationship with the waves, and we need to make the most of that, understanding what it looks like in the 21st century. Our marine environments are already under threat from sewage and plastic pollution. Having a dedicated marine industry strategy will allow us to carefully manage the development of our biodiverse areas out at sea. That is why we need to have new targets for marine protected areas and to mandate the Government to monitor those sites fully.

Addressing the climate crisis is about embracing opportunity and empowering communities to make the most of their surroundings. It is time that the UK stepped up as a world leader in this area, so I hope the Minister will agree to listen to our proposals, which will benefit the marine renewables sector greatly.

Gas Storage Levels

Wera Hobhouse Excerpts

Monday 13th January 2025 Commons Chamber

[Michael Shanks]

Conservative Members ask, “When?” —they had 14 years in power, and in 14 years did not build a single new nuclear project. The former Minister for nuclear, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), loves to shout about all the consultations that he launched, but he did not build a single new nuclear power station.

My hon. Friend is right to make the point that we should move forward with nuclear—we want to see nuclear projects move forward as quickly as possible. My hon. Friend the Minister for nuclear is moving forward with two of the biggest projects, as well as the small modular reactor competition. We are quite rightly going through a process to ensure that it is as robust as possible, but we will have more to say in due course.

[Wera Hobhouse (Bath) (LD)]

Last Friday, I met Wales & West Utilities, which runs the gas grid in my constituency and beyond, where I heard that hydrogen is still a very viable option for home heating. Although there have been a number of pilots, the Government have recently gone quite quiet on hydrogen in home heating. Will the Minister update us on the steps he is taking to progress hydrogen for home heating?

[Michael Shanks]

The hon. Lady raises the potential of hydrogen in our energy mix. Of course, one of the real strengths of the gas network is that it can be changed into other things in the future; that is a real strength of what we have, and we are looking at what those options might be. There is a mix of options available with hydrogen, including home heating, but it could still play a really key role in industrial projects, for example, in the shorter term. We are looking at those projects. We need to ensure that it is financially viable and that we have worked out all the technological details on how we would make it happen. We will have more to say on that in due course.

Oral Answers to Questions

Wera Hobhouse Excerpts

Tuesday 12th November 2024 Commons Chamber

[Michael Shanks]

I recognise the hon. Gentleman’s point, and I am looking forward to meeting him and his colleagues this afternoon to discuss the particular issues in his area. We need to build more network infrastructure across the UK to make this endeavour a reality, but he is right: we want to bring communities with us on this journey. That is why we have said that we are looking again at what community benefits will look like, building on some of the work that the previous Government did in consulting on this issue. Crucially, however, if want to bring down bills and deliver energy security, we will have to build the infrastructure, and that is what this Government are committed to doing.

[Wera Hobhouse (Bath) (LD)]

The Minister knows well the Liberal Democrats’ commitment to community energy. Will the Government establish a clean community energy scheme, look at the barriers that currently face community energy projects and look at supporting the National Grid to deliver community energy?

Great British Energy Bill

Wera Hobhouse Excerpts

Report stage
Tuesday 29th October 2024 Commons Chamber

[Pippa Heylings]

In fact, I said at the beginning of my contribution that I welcomed the constructive debate in Committee.

[Wera Hobhouse (Bath) (LD)]

If the Government have bought into the idea of community energy, does my hon. Friend not think it odd that they are so afraid to put it in the Bill?

[Pippa Heylings]

I could not have put it better myself. I thank my hon. Friend for leading the fight for the Liberal Democrats as the former spokesperson on energy security and net zero. That question goes to the crux of the matter.

We have fantastic examples from many communities of how important community energy is. My hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald) led the recent Westminster Hall debate, in which there were fantastic examples from rural communities of how they feel about community benefits. There are also the efforts of my hon. Friend the Member for Edinburgh West (Christine Jardine) in supporting the Aikengall community wind farm, which provides a direct benefit of an amazing £120,000 for the community.

Community energy is not just for Scotland. In my own county of Cambridgeshire, there is the Swaffham Prior community heat network, and the village is the first of its kind to switch to reliable zero-carbon heating. It was started by the Swaffham Prior Community Land Trust, and it addresses fuel poverty and the village’s reliance on oil heating. The Liberal Democrats will continue to promote those who have pioneered community energy schemes, proving their worth and championing their critical importance to our energy future.

While the Government have not previously backed our amendments, which is incomprehensible to us, I am grateful to the Minister for the conversations we have had recently and the assurances he has given us that the Government really do want to make provisions in the Bill for community energy in the Lords. I look forward to supporting our colleagues in the other place in this endeavour, but the interventions from Labour Members—saying that this will be in the founding statement and the strategic priorities, but not in the Bill—are causing us to doubt that commitment. I therefore urge the Government to make good on their promises. We know their commitment to community energy, so let that be understood clearly and let us put it in the Bill.

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[Victoria Collins (Harpenden and Berkhamsted) (LD)]

I refer Members to my entry in the Register of Members’ Financial Interests.

Energy is at the heart of our economy. It powers our homes, our schools, our workplaces and even our democracy. Most importantly, it is at the heart of our communities. This Bill must ensure that it brings those communities and community energy projects with it, which is why I am speaking wholeheartedly in support of amendment 5.

Local to Harpenden and Berkhamsted is the Grand Union Community Energy benefit society, which runs several community energy fund schemes, including solar canopies, and is investigating heating from aquifers. As a not-for-profit, it aims to use its proceeds to help householders, especially the most vulnerable, to reduce their energy bills and energy use. It also supports other community organisations that do not have a regular income. In Berkhamsted, it has worked with Sunnyside Rural Trust to review the energy strategy of its Northchurch site. I have spoken to passionate members, such as Sarah, Paul and John, about why they are making it work and the difficulties they face.

If we are to reach net zero, community energy is needed to fill a gap between individuals, businesses and councils. It was John who reminded me that if community energy is supported, there is a significant resource of people ready and waiting to put their voluntary efforts into getting schemes off the ground. By their very nature, they are embedded in their communities, and we must bring our communities with us if we are to make the change that is needed.

However, our community energy projects need support. Community energy projects face insurmountable costs when trying to sell the power they generate to local consumers. Grand Union Community Energy is nervous about taking on the delivery of projects, as there is uncertainty about how electricity prices may change in the future. Community energy needs stability too. As it stands, community energy schemes find it nigh impossible to sell their power directly to local consumers, which leaves pricing and some projects financially unviable without further support.

Previously, feed-in tariffs helped to provide pricing stability, but when that scheme ended in 2019, many planned community projects were scrapped and the number of new projects slowed significantly. Current access to funding has been vague, erratic and uncertain, especially since the rural community energy scheme ended, and I know many people have not bothered to apply for funding because they find it so difficult.

We must unlock the potential of our community energy projects, and that is why I support amendment 5. There are many ownership models. The Liberal Democrats are calling for large energy suppliers, when they work with community energy projects, to work with them to sell the power they generate to local customers at a discounted rate and provide community benefits. Overall, we must ensure that these projects are financially viable and supported with technical, commercial and legal advice, and we must seize this opportunity to bring our communities with us.

[Wera Hobhouse]

I welcome that the Government are taking renewable energy investment seriously and creating a mechanism for it. In common with many Liberal Democrat Members, I will focus on amendment 5, which would specifically require Great British Energy to support community energy projects as part of its strategic priorities.

Labour Front Benchers have supported community energy for a long time, and cross-party support was clearly displayed on Second Reading, as it is by the large number of Members’ signatures on amendment 5. The same was true of my amendment 2, which was sadly defeated in Committee. To their credit, the previous Government introduced the community energy fund, which made a difference, but more needs to be done to support community energy. Despite strong cross-party support for community energy, the Great British Energy Bill makes no mention of it. Liberal Democrat Members believe that it should be on the face of the Bill.

In Committee, the Minister said that including community energy in the Bill was not appropriate. I understand that GB Energy is not precluded from supporting community energy by the Bill, just as I understand the Government’s argument that if the new company is to be able to work flexibly, it should not be hampered by too many provisions in the Bill. However, our concern remains that unless something concrete is included in the Bill, future Ministers, Governments or chief executives of Great British Energy may decide not to support community energy and the full benefits of local energy may not be realised. Amendment 5 would strengthen the Bill in line with the clear parliamentary consensus in support of growth in this highly promising clean energy sector.

The community energy sector has seen minimal growth in recent years. It has suffered from damaging policies, such as the end of the feed-in tariffs that helped fuel growth. Since 2010, there has been no growth in the sector. Regulatory changes are required to ensure that communities receive the benefits they deserve for hosting clean energy infrastructure. All of these arguments are well understood and the benefits of community energy have been well researched. The new Government have said time and again that they support community energy and that it is a shared aim.

I welcome the conversation and the open debate on this issue. I understand that the Government take issue with putting the term “priority” on the face of the Bill. The passage of the Bill has not reached its final stages, and there is room for further debate. I very much hope that the Government recognise how strongly colleagues across the House feel about including specific support for community energy, and that such an inclusion will create cross-party support for the Bill as a whole.

[Llinos Medi (Ynys Môn) (PC)]

First, let me congratulate the hon. Member for Dewsbury and Batley (Iqbal Mohamed) on his passionate maiden speech.

I rise to speak to amendments 11 and 12, tabled in my name, which seek to provide certainty to particular energy sectors that they will be prioritised by GB Energy. I must declare an interest as an officer of the marine energy all-party parliamentary group, of which the UK Marine Energy Council is the secretariat.

Large-scale Energy Projects and Food Security

Wera Hobhouse Excerpts

Tuesday 22nd October 2024 Westminster Hall

[Wera Hobhouse (Bath) (LD)]

It is a pleasure, Sir Mark, to listen to this lively debate and I congratulate the hon. Member for Ynys Môn (Llinos Medi) on bringing it to the Chamber. There are clearly some different opinions, but I think the overall consensus does obviously emerge. Food security and energy security are equally important. Clearly we should not be displacing good productive farmland for any use that is not food production. As I understand it, the pressure comes mainly from landlords evicting active tenant farmers from their land. In that context, I first ask the Minister whether the Government will actually bring in the long-awaited tenant farming commissioner, who would look at these tensions between landlords and tenant farmers.

As we have already heard, the threat to UK food security comes not from renewable energy projects, but from a number of complex interrelated issues relating to how our food is produced, how it is subsidised, sold onto the middleman and supermarkets, and to a demand and supply mechanism that is broken.

At the heart of our food supply problems globally is climate change. Therefore, tackling climate change must be our top priority. Solar plays a major part in our efforts to get to net zero. More renewables also means less dependence on oil and gas and better security for our constituents when it comes to their energy bills. This year, England will produce 26% less wheat than in 2023. This comes after the wettest 18 months since records began. The loss of wheat in 2024 alone is over 5,000 times greater than the loss of food production caused by three new solar farms being approved in July. These are the figures we need to take into consideration.

When it comes to food supply and security, solar farms are a drop in the ocean compared with what we lose to the climate crisis. Meeting the UK Government’s plans for increasing solar energy by 2035 would mean using about 0.3% of the UK’s land—and we have already heard the comparison with golf courses. We need to look at how we sensibly use all our land. My constituency of Bath is served by solar energy from Lightsource BP, which is helping the UK to transition to net zero through solar projects. Projects like these need timely grid connection, and the Minister will know that that is currently the biggest barrier to farmers diversifying their income through renewable energy.

Even if all future ground-mounted solar was built on farmland, the impact on UK food production as a result of the change in land use would be very small. As solar technology develops, it will need less space in the future. An example is bifacial panels that capture solar light on both sides of the panel. There are also types of solar panels where crops can be grown below. Many farmers who are unlikely to volunteer their best land for solar power are positive about this technology. Many solar farms are home to grazing animals like sheep, which live alongside the panels. We do not have to choose one or the other. Many farmers find it useful to lease less productive land to energy companies for solar farms, providing much-needed additional income. If farmers must keep productive farms, they must also be profitable. It would be bad for food security to take away what could be an important income stream for farmers.

The National Farmers Union agrees on the importance of renewables and says that,

“solar projects often offer a good diversification option for farmers.”

We should not be prohibiting farmers from using their land how they best see fit. If crops can grow and livestock can graze while the same land accommodates solar panels, where is the issue?

We need to guarantee food security by implementing a national food strategy. The Liberal Democrats would boost the farming budget by £1 billion. We must support farmers to produce high-quality food to high standards while also improving our natural environment, and we must encourage people to buy local. It is so important that people understand the connection between locally produced food and high-quality food—and, yes, we occasionally have to pay a little bit more for it, but these are the important connections and arguments we need to make.

The Liberal Democrats have been calling for a proper visa and seasonal worker scheme. This would allow our farmers and fishers to access the workforce they need. We would also provide an extra £1 billion for the ELM scheme to support profitable, sustainable and nature-friendly farming across the UK. The Government also need to ensure effective regulation of UK food systems, agriculture and land use. We would seek to strengthen DEFRA, which is currently under-resourced and undervalued.

We should not have to choose between solar farms and food security. Farmers must be free to make their own choices and be supported to do so, and I hope the Government are listening to farmers.

Great British Energy Bill (Third sitting)

Wera Hobhouse Excerpts

Committee stage
Thursday 10th October 2024 Public Bill Committees

[Pippa Heylings]

I thank the hon. Member for making that point about the cost for communities of connecting to the grid, which makes it completely unviable for them to do so. It is not about capacity; the communities know what they want to do and are ready to do it. Unfortunately, although there is a right to sell energy locally, the cost of connection makes it completely unviable.

[Wera Hobhouse (Bath) (LD)]

An additional problem is that small community energy projects cannot provide directly—cannot sell directly—to the consumer. That is one of the major problems. Therefore, the Government should really put their mind to it and accept our amendment, so that we can assure our communities that the Government are really serious about this issue. Does my hon. Friend agree?

[Pippa Heylings]

I very much agree. Indeed, I find it very hard not to agree with my hon. Friend, who tabled the amendment.

We are obviously waiting to see the local power plan. We hope that it contains detail not only about the benefits, as with the Scottish and Welsh examples, but about the ownership model empowering local communities to do this work.

Given the cross-party support for the amendment, I will not withdraw it.

Question put, That the amendment be made.

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[Perran Moon (Camborne and Redruth) (Lab)]

Although I entirely agree with the importance of the warm homes plan, I am getting really concerned that we are losing focus. We are looking to create a Bill that allows the scope and flexibility to ensure—I am glad the Minister mentioned this earlier—that the UK taxpayer gets the best bang for their buck. As the expert witnesses consistently testified, one of the key benefits of the Bill is that it is not overly or unnecessarily prescriptive and allows the scope to develop the strategic priorities, referred to in clause 5, that focus on ensuring that we get this right. I look forward to speaking to the Minister in due course about those priorities. GB Energy will work alongside and in partnership with the private sector, but we must avoid trying to be too prescriptive in a specific Bill focused on this area.

[Wera Hobhouse]

The hon. Gentleman is a new Member of Parliament; I have been here a little longer. Those of us who have been here longer always want to ensure that something is in statute—in law—because we parliamentarians are always a little wary of leaving it to a further document that may or may not come. We would like to see some assurances in law to ensure that whatever has been promised will actually happen. Does the hon. Gentleman share my concern?

[Perran Moon]

I am absolutely delighted that the Government are already talking about the warm homes plan. We have a plan, and it is coming through; we have talked about it coming through in spring. Today we are talking about the Great British Energy Bill, and it is really important that we retain the focus on ensuring that the Bill has flexibility, so that we can see the strategic priorities delivering on GB Energy specifically.

--- Later in debate ---

[Michael Shanks]

That is an important point. We will announce more about allocation round 7 in due course, and how our industrial work and British jobs will work together to create those supply chains. It is an important point about the broad nature of what we want to do: to give confidence to industry that a pipeline of projects will be coming long into the future—beyond 2030, actually, although that is our initial key target—so that it is worth investing in and building the factories and supply chains in the UK. Great British Energy will be part of that, but it will certainly not be the entirety of it. We are working with the national wealth fund and the UK Infrastructure Bank to deliver more of those projects in the UK.

The final function, which the shadow Minister will appreciate, is that Great British Energy will help advance the work of Great British Nuclear. We will say more in due course about exactly how those two organisations work together. Those five functions enable Great British Energy to deliver on its clear mission of driving forward clean energy deployment, boosting our energy independence, creating good jobs and ensuring that UK taxpayers, bill payers and communities reap the benefits of clean and secure home-grown energy.

[Wera Hobhouse]

Will the Minister confirm that he said that we might cross-reference the five functions in the Bill? In that way, people will be clear, for example, that community energy is cross-referenced in the Bill as one of the five functions. Did he say that earlier?

[Michael Shanks]

No, I did not say that. What I was saying was that the context of the objects in the Bill is given by the functions that we set out in the founding statement. It is clear that those founding principles of Great British Energy, which the Secretary of State announced in that founding statement along with the start-up chair, Juergen Maier, will be largely what drives the initial statement of priorities for the company.

The objects themselves are around creating restrictions on what Great British Energy can do. We have left them deliberately broad so that the company is able to move in and out of different spaces. I am not sure whether the hon. Lady was here earlier, but we said clearly that there is nothing in the Bill that precludes community energy at all. I have repeated a number of times our absolute commitment to that and to the local power plan.

We will turn to clause 5 in due course, but it is relevant to the point we are discussing. Great British Energy will, of course, be operationally independent—a model adopted by a number of different companies; it is important for it to have its own board of experts in their fields. However, the Secretary of State will be able to set the company’s strategic priorities, which we will debate later. That is to ensure that although Great British Energy is operationally independent, it is setting out the functions in its founding statement while remaining agile to the Government priorities of the day. Importantly, it is a vehicle for delivering the central points of Government policy, including community energy, energy efficiency and many of the other things we have talked about. I commend the clause to the Committee.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clause 4

Financial assistance

Question proposed, That the clause stand part of the Bill.

Great British Energy Bill (Fourth sitting)

Wera Hobhouse Excerpts

Committee stage
Thursday 10th October 2024 Public Bill Committees

[Andrew Bowie]

It is a pleasure to serve under your chairmanship, Sir Roger. The amendment would bring to the Bill a concrete objective for Great British Energy to reduce the wholesale price of electricity. I am pleased to move this amendment, which will introduce a specific strategic priority to reduce wholesale electricity prices and to require that an annual report is produced on how Great British Energy’s activities are affecting wholesale energy prices and therefore consumer electricity bills.

Further to the discussion earlier about the impact of Great British Energy on bills, notable by its absence, sadly, is a purpose for GB Energy to reduce wholesale electricity prices. As we noted earlier, the Bill states that the objects of GB Energy are only to facilitate, encourage and participate in the production of energy, the reduction of greenhouse gas emissions, improvements to energy efficiency, and measures for ensuring the security of supply. It would be remiss of the Government not to include the ambition to reduce the wholesale price of electricity as a strategic priority of the company.

Why is reducing wholesale electricity prices important? Wholesale costs account for about 60% of a customer’s energy bill and are a major consideration in suppliers’ retail pricing decisions. In the two years since Vladimir Putin’s invasion of Ukraine, we have seen the sizeable impact of the international energy crisis on bill payers in the United Kingdom. Tensions rising in the middle east could very much affect our domestic energy costs, so it is more significant than ever that we take into account the impact that Great British Energy could have on wholesale electricity prices to reduce consumer bills as much as possible.

It should be incumbent on Great British Energy, through its investments and its part and full ownership of projects, to drive down wholesale electricity prices to the benefit of UK bill payers and businesses. In winter 2022-23, the Conservative and Unionist Government paid half the country’s energy bills to protect households from the worst of the energy shocks triggered by that war in Ukraine. Energy bills, alongside the pressures of inflation, have been a consistent worry for all our constituents. We also have the highest energy costs for industry in Europe.

The Government have outlined that their plans to tackle future energy security, to reduce bills and to lower wholesale prices for electricity hinge on the creation of GB Energy. Therefore, it would be prudent to write into the Bill the strategic priority to reduce wholesale electricity prices. On Tuesday, we heard from the chair of GB Energy that

“Every megawatt and gigawatt of renewable energy that we put on the grid will help to bring bills and prices down.”––[Official Report, Great British Energy Public Bill Committee, 8 October 2024; c. 6, Q5.]

I agree. Therefore, it has been intimated that that is indeed a strategic priority for GB Energy, and the Bill ought to reflect that.

This group of amendments also introduces the requirement for the Secretary of State to give a specific direction to Great British Energy that it must report on its progress.

[Wera Hobhouse (Bath) (LD)]

I have an honest question. Since energy is sold in a daily, 10-minute or whatever market, and that market operates, how can the Government ensure that the market behaves in the way they want it to behave? Is that question useful? I want to understand what the hon. Gentleman’s amendment will actually do to guarantee the price, since British energy operates in a market.

[Andrew Bowie]

That is an important question. I think we all agree that the reason the United Kingdom was so exposed to the energy price shocks that the entire western world has experienced over the past two years was our overreliance on the highly volatile fossil fuel market. Building new technologies to drive us towards a cleaner future and lower bills is therefore important. Our exposure to the market to which the hon. Lady refers had an adverse impact here in the United Kingdom. Just as stating in the Bill that a reduction in bills is important, the reduction of wholesale electricity prices should also be a stated object in the Bill. If GB Energy is to do anything, alongside all its other strategic objects, surely it must be working towards a reduction in electricity prices. We would therefore like to see that on the face of the Bill.

[Wera Hobhouse]

The hon. Gentleman is being generous in giving way. Would that not be a clear state intervention in the market?

[Andrew Bowie]

I do not think so, but the creation of the company is a state intervention in the market. That is one reason we on the Conservative Benches disagree with the Bill. We think that we can drive up investment in renewables and new technologies in this country by allowing companies the freedom to invest and by creating the best environment for private investment in this country. That is what we did when we were in government. That is why we have the first to the fifth-largest offshore wind farms in the world, and that is why we cut emissions faster than any other country in the G7, at the same time as growing the economy. That is a record that I am very proud of, and I worry that this state intervention in the market will have a negative effect.

We are debating the creation of GB Energy and this Bill. As part of that, a reduction in electricity prices should be one of the strategic aims.

--- Later in debate ---

[Michael Shanks]

I think my hon. Friend the Member for Peterborough has a lot to answer for, with the metaphors that have now started, but the hon. Lady makes a serious point. I would just gently challenge one point that she makes. The statement of strategic priorities is not about giving every detail on all the objects. The direction of the company is already very clear. The reason that the objects have been left broad is so that the company can explore opportunities in all those areas without having to come back and get direction on every single point.

[Wera Hobhouse]

Will the Minister give way?

[Michael Shanks]

I will answer the previous intervention first. The point of having an independent company—this is why it is used as a mechanism by Governments of all types—is that it can have the flexibility to move. That flexibility is within the very strict parameters set by Government, but with a broad scope to move into opportunities as they arise.

[Wera Hobhouse]

I thank the Minister for giving way. The second part of his reply answered what I am worried about, and what we as a Committee have been worried about all along, which is parliamentary scrutiny. Will the Minister advise at what point that parliamentary scrutiny can be exercised?

[Michael Shanks]

The hon. Lady is well versed in how Parliament works, and there are a number of mechanisms already open to Parliament to scrutinise the work of the Department and the Secretary of State. Indeed, the transparency around clause 5 is that this will be laid before Parliament in the same way that the priorities for the UK Infrastructure Bank and various other independent companies are laid before Parliament.

On the hon. Member for South Cambridgeshire’s second point, which I did not get to and is a very fair point, we are not seeking to design something behind closed doors that has no engagement. I have taken a lot of meetings in the three months that I have been a Minister, and I am very happy to take many more. We want to hear a broad range of views on this and we are happy to discuss it, but there is a balance between having an open approach to how we create, draft and bring ideas together, and ending up with a document—in the end, it will not be a huge document—that just goes round a process for months on end and stops the company from getting on with what we want it to do.

We heard from all the witnesses on Tuesday that speed is important; we do not want to waste any time, and I think that the Liberal Democrats support that approach. We want to get on and do it, and that is important. As I said earlier, I will come on to the point about the devolved Governments and the engagement that we plan with them in due course.

Furthermore, in setting up a company, the company is subject to all the requirements that other companies are, in terms of Companies House and having to produce annual accounts and an annual report. The activities of the board will also, of course, be available so that people can see what decisions the company is making. It is important that this company is at arm’s length from Government but has all the benefits of being publicly owned, in that it is required to manage the stewardship of public funds in a careful and accountable way.

In my view, the amendment is unnecessary, as the processes are already in place to scrutinise the work of Great British Energy and the work of the Department more generally. We will not be accepting the amendment today.

Oral Answers to Questions

Wera Hobhouse Excerpts

Tuesday 8th October 2024 Commons Chamber

[Miatta Fahnbulleh]

We have an ambitious plan to build more homes. We want those homes to be fit for the future. We will put out information in due course on the standards we want across those homes, but we have an opportunity to do insulation, energy efficiency and homes that are fit for the future, at the same time as building the homes we need.

[Wera Hobhouse (Bath) (LD)]

Local authorities play an important role as trusted sources of knowledge and expertise, and guide householders, for example, to trusted installers, but they need the resources to do that. Will the Department devolve some resources to local authorities to fulfil that important role?

[Miatta Fahnbulleh]

We see local and regional government playing an absolutely fundamental role to reach homes that we need to upgrade, but also to help us deliver the scale of ambition we want. Local and regional government will be a key part of our warm homes plan.

Great British Energy Bill (First sitting)

Wera Hobhouse Excerpts

Committee stage
Tuesday 8th October 2024 Public Bill Committees

[Torcuil Crichton]

And economic benefit too, we hope.

Juergen Maier: Of course.

[Wera Hobhouse (Bath) (LD)]

Q Good morning, Mr Maier. It is very good to see you here. I have some questions about the overall aims that the Bill and the company are trying to achieve. You have just said that it will be an enabler, so we have to imagine it as something that will happen before any contracts for difference are attributed. It is an enabler to make people and companies ready to bid into the CfDs, for example. Is that how you see the role? People are used to the status quo, and the CfDs have been very successful. Some companies are wondering how it is all going to fit together.

Juergen Maier: Certainly the enabling part of what we do will be pre-CfDs, as you say. That is also where our partnership with the Crown Estate comes in. This is where we will be doing a lot of the early consenting and engaging on the willingness to co-invest and give confidence, but we will also be there past the CfDs. As and when the schemes get developed, there may be opportunities to come in and be a co-investor. We would also be supporting that.

[Wera Hobhouse]

So—

[The Chair]

Order. Is this within the scope of the Bill? Our last question will be at 9.47 am, and four more Members have indicated that they wish to come in.

[Wera Hobhouse]

Q Does the Bill give us enough clarity? How will other financial institutions, such as the UK Infrastructure Bank or the British Business Bank, support what GB Energy is trying to do? The Bill is very short, so I wonder whether there is enough scope within it to explain that to investors.

Juergen Maier: There will be two things. The Bill clearly sets out the structure of how we will set up Great British Energy and the key areas of focus. Obviously there will then be a business plan and a framework agreement between us and the Secretary of State, in which we will have to clarify exactly those questions and where Great British Energy and the UKIB take their role. Those are things that will need to be clarified, but I do not think that putting them in the Bill would particularly help us to do that.

[Wera Hobhouse]

Q I have one last question about the timeframes, which are very vague. The Bill states:

“The Secretary of State must prepare a statement of strategic priorities for Great British Energy.”

Do you have any idea of when we can expect that statement to be laid before Parliament?

Juergen Maier: I am not sure of the exact timings. Maybe when you get evidence from the Minister he will be able to put a time on that.

[Perran Moon (Camborne and Redruth) (Lab)]

Q Mr Maier, you have talked about how local communities will benefit from community energy; you mentioned floating offshore wind off the east coast of the United Kingdom. Down in Cornwall, we are very close to the Celtic sea opportunity, which is between us and Wales. Could you elaborate on the benefits, particularly the social benefits, that may come from the Celtic sea development in an area like Cornwall, which is one of the most deprived in the UK?

Juergen Maier: Indeed. The earlier question was pointed at the north-east and Aberdeen, hence my response, but you are right. As a matter of fact, the two key areas where floating offshore wind will be developed are in the north-east and in the Celtic sea. From a logistics point of view, you could not put them further apart, so it is not exactly ideal—

--- Later in debate ---

[Wera Hobhouse]

Q Good morning. I want to come back to clause 5 of the Bill, which is about the statement of strategic priorities. Most of what I have heard this morning is that we are a bit worried about there not being enough detail on certain things. Should there be more detail about the strategic priorities in the Bill, such as job creation, or should there be a precise timeline for when we can actually expect that? The whole purpose of the Bill is to speed up all that energy transition, and currently we do not know when we will see a statement. Is it important that we actually get some timelines in the Bill?

Mike Clancy: The simple answer is yes. The longer there is a concept phase, albeit a positive concept phase, the more that we are talking about a multiplier effect from GBE in many respects. If GBE is delivered, starts to operate and gives confidence to the direction of energy policy, other investors will see this as a serious proposition and therefore we will be engaging in this huge process of energy transition.

As I said just a moment ago, it also means that talented people can see a future. We want to be part of that. So, within the process of parliamentary drafting, the more that we have a clear set of objectives—actually differentiating it as a public entity and setting the tone for what you want from energy assets in the future—the better, because that will give that confidence. That also has a knock-on effect for the confidence of private investors in other parts of the energy environment.

[Uma Kumaran]

Q Thank you both. I really welcome hearing the views of trade unions in this session, especially about keeping workers at the heart of this. Do you think that GB Energy can help to drive the demand for skills and apprenticeships and prepare our workforce for a just transition?

Mika Minio-Paluello: There is a lot of demand at the moment, and a part of the challenge is a significant lack of supply. Part of the reason for that lack of supply is that there is a lack of investment. We as a country have not invested into our workforce sufficiently over time, which is why you get into a situation where different sectors effectively end up poaching people who are most in demand.

GB Energy provides a mechanism as part of solving that. It will not solve it as a whole—the Government have other plans as well to try put that investment in— but it can have a significant role in going, “Yes, here, we are going to provide that long-term investment directly.” Also, clearly, GB Energy will be partnering with the private sector. In that co-operation, it can then say, through its procurement powers, “Okay, in our joint project on this big offshore wind farm, we are going to require the supply chain across the board to be investing into apprenticeships, whether that is one, two or three tiers down,” so that we get that overall growth. It therefore can play a significant role there.

Mike Clancy: I have already touched on this. It might sound strange, but we probably have a bit of a mission at present because of the constraints applied by the previous Administration to remove our members in technical occupations in the energy field from the public sphere, because the labour markets that they operate in reward better in the private sector. The private sector is in a war for talent in this area because, in this country, over the many decades, we have not valued STEM skills and engineering. I speak as a humanities graduate who is always in awe of people who actually go to institutions and learn things that matter and are then applied for the health of the nation.

We have to start with valuing STEM—valuing it on a diverse basis, ensuring that the workforce reflects our diversity objectives more generally—and having a clear understanding that, even within Government, there can be an element of robbing one to pay for the other, such as with defence and aviation. Lots of areas need these STEM skills, which are then easily transferable into digital skills, and there are better salaries for some of those elsewhere.

If you want to deliver that promise about high-quality jobs, you really have to think and have a labour-market strategy for GB Energy that works in this competitive context at all levels—from apprenticeship, through to technical, through to engineering and even through to doctoral level. Again, in terms of the direction and objectives of the Bill, it is about being an exemplar for the entire energy sector in relation to the skills matrix, with how people are employed and the diversity objectives that any public company should have. That is what the Bill should try to address in sufficient detail.

--- Later in debate ---

[Torcuil Crichton]

Yes, what can the Bill and GB Energy itself do?

Ravi Gurumurthy: I have already articulated what it can do on the development side to get rid of some of the risks to do with planning, consenting, grid connection and so on. On the more novel technologies—small modular reactors, floating wind, tidal range and so on—I think we have also talked about how if the state is co-investing in some way, it signals a degree of commitment and insulates companies slightly from the risks. In both the investor and developer roles, GB Energy can play a role in accelerating things. The biggest way in which the state can de-risk investment and increase private sector contribution is through the National Energy System Operator, providing a clear, strategic plan and forward visibility of what is happening in terms of technology and location. That is how I think we will get the investment—not just in the assets, but in the supply chain as well.

Shaun Spiers: On clean, flexible power, what Green Alliance has proposed is a sort of vaccine taskforce-style operation to crowd in all potential technologies for this. It is not clear who would fund it, if GB Energy did not. That is a really important part of 2030 power decarbonisation. There is also the local power plan. The previous Government had a plan—I think it was in 2014—to power 1 million homes by community energy, which was abandoned four years later with about 67,000 homes powered. There is a clear remit here for making community energy economically viable and getting local investment in community energy.

[Wera Hobhouse]

Q I want to come back to what Shaun said a little earlier about the slight risk of the great power that the Secretary of State has. Do you think that there should be some protection in the Bill for communities, so that they can have a say? We also know that quite a lot of the delivery of our new transition infrastructure might be delayed because communities are not entirely certain, for instance. Is there a risk, and should there be something in the Bill that protects communities, so that they can be confident they are part of the transition and are being listened to?

Shaun Spiers: I think a nature recovery or nature protection duty in the Bill would be helpful in reassuring communities. The investment in community energy, where people really have a stake in the energy, will take some of the sting out of the opposition to renewables, but I would not overload the Bill with things that are better dealt with in the planning system. This is a Bill to enable a lot of investment in achieving a decarbonised power system and long-term energy security. To try to overload it with things that are best dealt with in other parts of government, or other legislation, would be a mistake.

[Wera Hobhouse]

So the Bill is sufficient in protecting communities?

Shaun Spiers: I would like to see a nature recovery duty in the Bill.

[Catherine Fookes]

Q Welcome to the participants. My question follows on beautifully from Shaun’s comments around community. How do we think that GB Energy can accelerate and drive investment in the development of community enterprise and community energy?

Shaun Spiers: One thing that is necessary to say is that this is a major part of the transition and a priority of the Government. That was the case for periods during the coalition, when there was a really vibrant community energy movement and a sense in which people were coming around to supporting renewable energy—which otherwise they would have opposed—because they could see they had a financial stake in it but had also been engaged in developing it. What snuffed that out had more to do with planning issues than with investment, but there are ways in which GB Energy can pump-prime some of the investment.

I am trying to think back to the community energy manifesto we put together in 2018. I cannot think of any specific things, but I can write to the Committee, if that is helpful. There are specific financial incentives that would help get this off the ground. To be honest, though, communities across the country were really keen on community energy. It was a vibrant movement and could be again, with the right political framework as much as investment.

--- Later in debate ---

[Josh MacAlister]

Q Dan McGrail, this is a question for you. What are the views of your private sector members about the role that GB Energy can play in de-risking investments and crowding in private sector investment? What are they saying at the moment?

Dan McGrail: Occupying space where there is a highly liquid market for private capital is unlikely to bring much additionality. Offshore wind is one of those places —fixed-bottom offshore wind, to be precise. That is a mature market; there is capital that will flow to projects if the wider investment conditions of those projects are right, and that is more Government policy-related. However, there are other markets. For example, onshore wind in England has basically been under-invested in for the past decade. There will still be nervousness within the private sector: “Do I want to be the first developer to test local planning? What does the risk profile of that look like?”

I see a clear role for GB Energy to partner with the private sector to help to accelerate the return of investment in that market, or for example within the growth of the floating offshore wind market, where there are clear opportunities that go beyond just the energy sector and into transition, such as floating offshore wind in Scotland or in the Celtic sea, where we know that there is a much bigger economic growth story. Those are areas where I think we could see public and private capital working very comfortably together.

[Wera Hobhouse]

Q We had a line of questioning around research and development. Do you think it is important that the Bill is future-proofed in that way—that GB Energy really focuses on those markets and those projects where the private investors would not come in behind? Is there any way in which the Bill could strengthen that? Research and innovation is probably one of the main focuses of what GB Energy can deliver successfully.

Adam Berman: A fundamental conundrum with GB Energy will be the extent to which, through legislation, you want to constrain its investment activities. Clearly, from an industry perspective, we are very keen that there be an emphasis on additionality, on complementing and not duplicating private sector capital that is already there.

Dan mentioned wind. The recent CfD allocation round 6 auction crowded in about £20 billion of private sector investment—that is one year and one auction. That is not to say that £8.3 billion capitalised over a Parliament is not a significant sum of money; it is to say that if we want the most bang for buck, it is absolutely about thinking about those areas where it can be complementary to the private sector. On the one hand I am saying that, yes, industry would be very happy for GB Energy to have that as a focus, but it is also fair to say that it would be a restriction in GB Energy’s activities if it were only to engage in a space that enabled additionality, because it would restrict some of the investment portfolio that it could end up with.

Dan McGrail: The private sector and the industry in general have been quite clear that we see a real benefit in the participation of GB Energy in emergent technology, such as tidal energy. However, even within the five founding statements, there is nothing specific about fostering UK home-grown innovation. I would err on the side of caution within legislation, or at least I would not put it as a boundary condition. It should not be the only thing, but if it were somewhere in the plan—either in the founding statements, if they get modified, or in the plans brought forward by the Secretary of State—that would be healthy.

[Catherine Fookes]

Q It is good to see you both. You were not here for the earlier sessions, but there were a lot of questions about whether there is enough detail in the Bill. Before I was an MP, I used to be the CEO of a charity; if the objects of that charity had gone into an incredible amount of detail telling me exactly what to do, it would have been very difficult 10 years down the line, when I joined the charity, to pivot and do what we did. I think you are absolutely right: we are hearing from every single witness that the Bill needs to be general enough to allow the business plan to be developed by the experts running the company. You are chiming with everyone else, which is interesting and good.

My question is about tidal power. I represent a Welsh constituency, Monmouthshire. We have the River Severn in the south of the constituency, which is a tidal river, and we have the Celtic sea. What opportunities will the Bill give to generate more tidal power?

Dan McGrail: The Bill allows space for GB Energy to take quite an activist role in the sector. I am aware of tidal power companies that are already very keen to engage with GB Energy on specific proposals. One thing about tidal power is that we have seen the success of many projects through the CfD auctions. We need to see them come to investment decisions. The more we can see a state actor enabling companies to take decisions, the more it will help to scale up the industry and then the technologies. From the technologies, we can hopefully deliver the kind of supply chain growth and jobs in local communities to which we all aspire.

Carbon Capture, Usage and Storage

Wera Hobhouse Excerpts

Monday 7th October 2024 Commons Chamber

[Ed Miliband]

My hon. Friend is entirely right. The challenge for the Government, and for the companies that have won these contracts, is to make sure that we create jobs in the supply chain, including in her constituency. I look forward to meeting her to discuss this.

[Wera Hobhouse (Bath) (LD)]

Waste incinerators release, on average, a tonne of CO₂ for every tonne of waste incinerated. They are usually called “energy from waste” but their environmental value is questionable unless carbon capture is attached. Yes, we need to recycle more, but energy from waste will be with us for years to come. Will the Secretary of State commit to significantly scaling up carbon capture for energy from waste plants?

[Ed Miliband]

The hon. Lady is absolutely right, and it is why one of the projects we funded is an energy from waste project. This is exactly the kind of role that CCS can play.