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The Minister for Energy Security and Net Zero (Graham Stuart)
It is a pleasure to serve under your chairmanship, Mr Twigg, and to conclude this debate, which was so brilliantly set off by my hon. Friend the Member for Waveney (Peter Aldous). As you will recognise, Mr Twigg, it is rare to hear, especially in a short debate such as this, such a wide-ranging, deeply thought-through and comprehensive speech as the one that we have just heard from my hon. Friend. His grasp of the key issues in the energy space is remarkable, and it is grounded not only in his constituency, but in the wider region he represents.
My hon. Friend will be aware of the important role of offshore wind, as he highlighted, and other renewables in delivering secure, domestically generated energy, and of the boost they provide for economic growth, although I am sure he will also allow me to set out the Government’s position. The policies set out in the British energy security strategy and endorsed in the “Powering Up Britain” papers, which I announced to the House on 30 March 2023, include bold new commitments to super-charge clean energy and accelerate renewable deployment. My hon. Friend suggests that we have the opportunity to be a global exemplar. Not to diminish the—for the most part—accurate and properly based challenges he set out, but we already are the global exemplar. We have cut our emissions by more than any other major economy on earth since 1990. We took the position—a rather parlous one, when we think about it—just 13 years ago, when less than 7% of our electricity came from renewables. That is now well over 40%. In some senses, we are a victim of our own success, which has created some of the grid pressures that he rightly highlighted.
Turning to coal, I am the co-chairman of the Powering Past Coal Alliance, an international grouping of countries and organisations committed to ending the use of coal in power production. Nearly 40% of our electricity came from coal as recently as 11 years ago, in 2012. Next year that figure will be zero. We are a global exemplar, although I share my hon. Friend’s frustration when he asked whether—despite all the jobs that have been created and our success in leading—we have harnessed all the economic benefit. Have we embedded the industrial capability that we could have for the long term? If I had a mission in this job, apart from delivering and helping to facilitate this extraordinary transformation, it would be to do so in a way that leads to the long-term, high-paid jobs that my hon. Friend is so right to challenge the Government to work towards.
Wind overtook gas as our largest source of electricity during the first three months of this year, delivering more than a third of our entire electricity supply for the first time. I am proud of that. As my hon. Friend has said, the east of England plays an important role in supporting our offshore wind ambitions. Just last year, our contracts for difference scheme allocated support for a further 7 GW of offshore wind capacity, the majority of it located in the North sea and supported through the east of England. Since 2014, we have more than doubled our solar capacity in east England to more than 2 GW, with a further 1 GW of shovel-ready capacity and 2 GW more in planning.
This Government have driven that change. We have introduced the landmark Energy Bill, which is currently passing through the House, which contains measures to accelerate the rate of deployment of offshore wind farms, reduce the time it takes to get planning consent, and reform environmental regulations to streamline processes, while maintaining protection of the marine environment, but doing so in a more strategically joined-up way—a thread running through my hon. Friend’s excellent speech. He may or may not be aware that the Department for Environment, Food and Rural Affairs is running the marine spatial prioritisation programme, which, on a cross-purposes analysis, aims to optimise the use of our seas and manage competing priorities on the seabed. It is, in conjunction with my Department, leading on exactly the kind of strategic overview that my hon. Friend rightly highlighted.
We recently concluded our consultation on making changes to the national policy planning framework in England—again, as part of pulling together a more strategic approach. When designated, local authorities will be better able to respond to the views of their communities when they wish to host onshore wind infrastructure. Offshore wind developers in East Anglia will also be required to consider co-ordination of their infrastructure before submitting a planning application for any new network infrastructure. My hon. Friend rightly highlighted the project-based, linear approach and the need for a more co-ordinated and coherent one. [Interruption.] I am being given further “refreshment”, which is always marvellous.
Where communities such as those in the east of England host this infrastructure, we want to thank and, to be fair to them, also reward them for doing so, as my hon. Friend said. Our consultation on guidance on community benefits for transmission network infrastructure closed a couple of weeks ago, and I hope to be able to share the results later in the year. We have also just closed our consultation on developing partnerships for communities who wish to host new onshore wind infrastructure in return for lower energy bills. My hon. Friend also picked up on that.
Finally, I want to discuss network infrastructure, which, as my hon. Friend said, is an essential component for driving renewable deployment, and we need to build it more quickly. In Great Britain, around four times as much new transmission network will be needed in the next seven years as was built since 1990. The timescales for delivering transmission network infrastructure are currently 12 to 14 years, often far longer than the time taken to deliver the generation being connected—and we all recognise that having wonderful, new, low-cost, brilliantly planned generation is no good if we cannot get the electrons where they need to go. The lack of network capacity is already a challenge, as around 5% of wind generation is currently curtailed, meaning its output is reduced because there is not enough capacity on the network to transport it. This could increase to between 15% and 20% in the mid-2020s, as wind generation increases further.
In order to accelerate the delivery of network infrastructure, we appointed Nick Winser as the electricity networks commissioner, who is tasked with advising on how we can halve the timeline for delivering new electricity transmission infrastructure. His report will be published imminently, and the Government will respond with an action plan later this year. We will also come forward with a connection plan at the more local level, precisely because of the central importance of sorting out our transmission.
Placing all new infrastructure offshore is not a feasible option, as ultimately the electricity needs to get to where the demand is, which is of course onshore. Therefore, even with offshore cables, infrastructure such as substations are required onshore at landing points. To support faster delivery of transmission and better co-ordination, the holistic network design, or HND, developed by the electricity system operator, sets out a blueprint for the connection of groups of offshore wind projects to the grid—again, picking up on my hon. Friend’s central point about the need for a more strategic and coherent approach, informed, as it will be, by high-level spatial strategies.
This is the first time that connections and transmission reinforcements have been considered together for multiple projects, and it is revolutionising the way that we design our network infrastructure. Considering multiple projects together has allowed opportunities to co-ordinate infrastructure while balancing impacts on the environment, communities, cost to consumers and deliverability of the infrastructure.
Of course, as my hon. Friend has said, concerns have consistently been raised about the proposed infrastructure in East Anglia. I would like to reassure the House that the Department is working closely with developers, transmission operators and National Grid ESO to explore voluntary options to minimise infrastructure where possible, while also recognising that timely delivery of projects in the east of England will be key to achieving the 2030 ambition for offshore wind.
In the limited time that I have left, I will try to briefly review some of the points that my hon. Friend made and consider whether I can make any reasonable response to them. He mentioned the revolution, and that is what is going on; indeed, we need to tell the story to the nation about how we are rewiring this country. If people look around even the most beautiful landscapes, they will see things that they usually do not notice because they are just so used to them—major pieces of industrial infrastructure that were required to create the foundations for the wealthy and successful country that we are. Nevertheless, we will need to rewire things. Even with the best will in the world and strategic planning, co-ordination and minimisation of impacts, as well as a real focus on good design principles, there will be impacts, and we need to let people know that delivering net zero will require them.
My hon. Friend touched on the fact that we have been developer-led, project by project, which is very much changing. He also mentioned the focus on delivery, and on skills and jobs. I co-chair the green jobs delivery group, which is the high-level Government and industry body that is looking to get the information from the engineering specialities that he mentioned, so that information can be shared with the Minister for Skills, Apprenticeships and Higher Education, who also sits on that body, to make sure that education programmes are better aligned with and support the kind of revolution that is required.
My hon. Friend also mentioned the CfD budget. When he talks about that, I think he is probably talking more about the administrative strike price, as we call it in our jargon-world. That is the top level that we will pay, whereas the budget is the amount that we will commission. We always keep that price in mind, and obviously we recognise that there are financing costs, supply chain squeezes and inflation. However, those things are very much taken into account when we design these policies. We cannot always get everything right, but the industry always tells us that we have allowed insufficient funds for this type of work and typically predicts, ultimately, rather less generation coming through than actually occurs. However, we are now operating on an annual basis, so that we can better respond to those issues.
My hon. Friend also talked about hydrogen and the role of the east of England in being able to deliver it, not least in Bacton, Felixstowe and the agriculture sector. Like him, I am very excited about hydrogen. If we can properly harness our unique renewable resources and do things correctly in a co-ordinated fashion, we will not only have low-cost electricity, but we will become a leader, certainly in the European context and perhaps globally, in the production of green hydrogen. Of course, we are also blessed—he did not mention this—with 78 gigatonnes of carbon storage; we have the vast share of Europe’s carbon storage potential, and we can host carbon storage for our neighbours, too.
My hon. Friend is quite right to highlight all the opportunities in these sectors, and he is also right to congratulate people such as Stuart Rimmer at East Coast College and John Best for the internships he has supported. He is also correct that not only do the Government need to get the overall frameworks right, but we need to facilitate and support local authorities, communities and individuals to play their part. If we get this work right, we will not only deal with the environmental challenges, but reinforce our industrial strength, and grow and strengthen the prosperity of this country. That process can be led, to a great extent, from the east of England.
Question put and agreed to.