Great British Energy Bill (First sitting)

Debate between Wera Hobhouse and Catherine Fookes

Committee stage
Tuesday 8th October 2024 Public Bill Committees

[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.

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[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.

Great British Energy Bill (Second sitting)

Debate between Wera Hobhouse and Catherine Fookes

Committee stage
Tuesday 8th October 2024 Public Bill Committees

[Wera Hobhouse (Bath) (LD)]

Q Thank you for answering our questions. In the morning sitting we struggled with the fact that although we all hope the Bill will do something, it has relatively little detail. We have already discussed the merits of not having too much detail, because then GB Energy would be hampered, and of having more detail. We have to try to find a balance in what we agree to in legislation. When you look at clause 4, are you content with the scope of the financial assistance provisions?

Alistair McGirr: Yes, frankly. I think there will be other protections in place—what was in old money called state aid protections but is now subsidy control. There will be wider provisions that ensure that GB Energy does not have adverse impacts on investment into the competitor space, be they state aid provisions or subsidy control provisions. That will ensure that what GB Energy is effectively legislated to be able to do does not adversely impact a competitive playing field. It is important to make sure that that is maintained. Ultimately, if there is a tilting of the playing field towards GB Energy, that will be a bad deal for either the taxpayer or the consumer.

Tristan Zipfel: I concur with what was said. It is really important that the establishment of GB Energy does not disrupt the dozens of billions of pounds that are going to be directed by the private sector into the renewables sector, or the clean energy sector in general, over the next decades. For that it is important to maintain trust in the fact that it is indeed going to be a level playing field and that GB Energy is not going to benefit from forms of assistance that would disrupt competition. That being said, I think GB Energy will have its own criteria, strategy and approach, which is absolutely fine. But it needs to be in the context of a level playing field from a competitive standpoint. That is really important.

[Catherine Fookes (Monmouthshire) (Lab)]

Q I welcome both witnesses to the Committee. Clause 5(5) states that the Secretary of State will consult Welsh, Scottish and Northern Ireland Ministers, so as a Welsh MP I am content—it sounds like you are, too—that our devolved Administrations will be consulted before things happen. I think it was Mr McGirr who said there were bound to be lots of projects in Scotland. I want to flag the fact that Wales is also extremely well placed to receive some of these projects in terms of hydro, tidal and wind energy. What in the Bill would help us to ensure that lots of the investment comes to Wales?

Alistair McGirr: I am very supportive of those projects coming to Wales. Obviously the Celtic sea auctions are another example of the upcoming opportunities in Wales. The reality is that GB Energy is not going to be the vehicle that drives that—that will be the wider policy framework in terms of what happens here in Westminster, and also in the regulatory frameworks that are in place and what happens in the devolved Administrations. My reference to Scotland is not to say that other parts of the country could not have the opportunities for investment. It is just that the sheer scale of the opportunities in Scotland for wind, hydro, some of the grid projects, CCS and hydrogen mean there is a significant opportunity in Scotland. That is one of the reasons why GB Energy has been located up in that area.

Tristan Zipfel: I can only concur. Wales is very important for us. We have onshore wind projects that we are actively promoting in Wales. I think GB Energy could play a role there. I want to emphasise, however, that I do not think GB Energy on its own will be the solution to unlocking the opportunities you describe. I think it is really important in Wales in particular that there is an effort on the policy side to provide more certainty and more visibility of the projects, as well as the question of the grid, which is a problem. But I concur that Wales is very important strategically from our standpoint as a renewable energy developer.

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[Wera Hobhouse]

Not in this Bill?

David Whitehouse: Not in this Bill—sorry.

[Catherine Fookes]

Q Mr Whitehouse, you mentioned inclusivity; I think you were referring to including the different devolved Governments in the UK. But when it comes to skills and inclusivity, I am interested in the important work of getting more women and a greater diversity of people into this sector. I was really pleased to see Ms Dawes and Ms Powis give evidence earlier. I purposely did not ask them—the two women in the room—how to get more women into the sector, but how can we get greater inclusivity and diversity into the sector through the strategic plan for Great British Energy? This relates to clause 5(8)(a), so it is in scope.

David Whitehouse: Let me talk about inclusivity in general terms. I am studying for a master’s in renewables; I am the energy transition, albeit slightly older. When we talk about inclusivity, those who come from an oil and gas heritage are sometimes excluded from the conversation. You need all those voices. When I talk about inclusivity, it is about “bring all the voices”.

How do we improve what we are doing? I have a couple of brief comments. Speaking personally, I thought the legislation on the gender pay gap was excellent. What does it do? It makes conversations and debates happen. Last week in the sector, we spoke about Vision 2030—how we are going to deliver on a sector that is truly inclusive, that looks like the future, not the past, and that is attracting the next generation, with commitments about targets that we wish to achieve.

There are seven pillars on the path to getting there. How do we do that? You need commitment from leaders in the sector; I think we can give you that. You need some targets; I think we can give you them. We also need a plan of action that holds us to account. I come back to the path to net zero: we will not do this if we are not inclusive and not attracting across the entire spectrum, the entire country.