Clean Power 2030 Action Plan: Rural Communities

Lord Whitehead Excerpts

Wednesday 22nd April 2026 Lords Chamber

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

My Lords, I am very grateful to all those who have contributed to this important debate and particularly to the noble Baroness, Lady McIntosh, for securing it in the first instance. She made a number of important points that go along, I think, with her particular view about the role of renewables but are nevertheless important points that need considering as far as this debate is concerned.

Before proceeding, I want to add my congratulations to the noble Lord, Lord Nagaraju, who made his maiden speech this afternoon. I think he will have gathered already from the acclaim around the House for his maiden speech that he will undoubtedly be a tremendous asset to our House in the future.

In her initial contribution, the noble Baroness, Lady McIntosh, listed a number of alternatives to Clean Power 2030. What was striking about the list of alternatives she put forward is that they are mostly things that the Government are doing already. They are not necessarily exactly in the context of the Clean Power 2030 Action Plan, although there are many more things in that plan than many noble Lords and others seem to think—for example, there is a substantial role to play for hydrogen in the action plan and on a longer-term basis after 2030.

The noble Baroness mentioned clean power: floating solar, energy from waste and small nuclear. The Government are actively involved in undertaking all these things at the moment. But I emphasise that they are not alternatives to the race or the journey to clean power; they are part of that journey, along with other things, such as offshore and onshore wind, solar, and various other arrangements that we can see blossoming before us.

The action plan is a requirement to get to mostly, or almost wholly, renewable power by 2030, both for reasons of carbon emissions reduction—and the move towards net zero by 2050—and to make sure that the nation has energy independence as far as is possible and that we are not dependent on fossil fuels from around the world dictating how our energy economy works for the future.

Noble Lords have drawn attention to just how hard this work will be to achieve those particular goals, and they are absolutely right: it is very ambitious to ask the energy system to translate itself into a low-carbon system with the speed that we hope will be achieved. But we ought to be clear that the means being put in place to do this are not the bogey mentioned by a number of noble Lords. This is genuinely clean power. It will, certainly for rural communities, enhance their way of life, with cleaner air and much greater community involvement in the power that will be introduced, which the noble Earl, Lord Russell, mentioned. Altogether, this will make our society a much cleaner, greener and more liveable place overall.

That does indeed involve certain changes to how we deploy our power in the future. Noble Lords have mentioned that we may use 10% of productive farmland, for example, for solar and similar activities. Reports were mentioned, and the land use framework published by Defra in March 2026, for example, states that renewables are projected to take up approximately 155,000 hectares of England’s utilised agricultural area, which is about 2%, not 10%. As the noble Earl, Lord Russell, mentioned, that is far less than the amount of land taken up by golf courses in this country for the future. So it is not the huge take that some people suggest.

[Lord Fuller (Con)]

The noble Lord is selectively quoting from the table, and he may indeed be right on solar, but the land use framework enumerates a whole load of other different types of use. In total, 1.7 million hectares—about a fifth of all the farmland in England—is to be taken from agriculture and applied to other uses. He cannot get away from that: those are the Government’s numbers.

[Lord Whitehead (Lab)]

The noble Lord says I am selectively quoting. I am sorry to disagree with him, but I am not selectively quoting; I am quoting. That is what the land use framework says on the best estimates for the land that is being taken. In addition to that, he and other noble Lords will be aware that, in the guidance and arrangements for the development of solar, there is a clear understanding that the best and most versatile land will be excluded from those solar developments and that they should go primarily on brownfield land or less-important agricultural land, so that precisely that best and most versatile land for farming and food use is preserved for that activity. That is what is happening with the solar developments coming forward at the moment.

The other thing I want to mention on rural communities is that, when we are putting forward proposals for grid coverage of the country, as other noble Lords have mentioned—the noble Lord, Lord Howell, for example—that is not just about clean power 2030. Among other things, it is about getting the grid fit for energy for the future in general. Even if clean power 2030 were not in place, it would be necessary to undertake that huge programme of grid renewal and updating, partly because of the extreme neglect of grid uprating that took place during the Conservative Government who immediately preceded this Government. We are not just undertaking a grid for the future but catching up from the past.

[Baroness McIntosh of Pickering (Con)]

I am not accusing the Minister in any way of misleading the House, because this is from a different department, but the actual figure that was consulted on by the Department for Environment, Food and Rural Affairs in January 2025 was that more than 10% of farmland in England was to be diverted towards helping to achieve net zero and protecting wildlife by 2050. That was in the consultation that was the prelude to the land use framework and I understand was in parallel to this net zero policy.

[Lord Whitehead (Lab)]

I am happy to write to the noble Baroness to clear up that exact point, but what I quoted from, as I am sure she will know, is the actual land use framework and not the precursors to it. At the final point when it was published by Defra, it came to the conclusion that I have mentioned. It is in table 1 on page 19 of that land use framework, so it can be looked at. I am very happy to write further to the noble Baroness on that particular point.

What is absolutely right, though, as indicated in the contribution from the noble Baroness, Lady Gill, is that we are basically all in this together. It cannot be the case that we can exempt parts of the country from the energy revolution taking place in front of us. But what we can do is make sure that, where it has effects on those areas, they are mitigated as far as possible: for example, as we are planning at the moment, they will have community benefits coming their way from those changes. Community investment through the discount schemes is also coming forward. A new electricity bill discount scheme will provide £2,500 over the next decade to households living within 500 metres of new and significantly upgraded transmission infrastructure, with the first payments expected in 2027.

We are also looking seriously at community benefit from upcoming changes to grid systems and various things. The SSEN’s upcoming Tealing to Aberdeenshire transmission line, for example, could mean funding of more than £23 million for local communities. There is assistance for communities that are associated with those changes, but also an understanding that, while those changes have to be made very carefully—with full consultation and appreciation of the difficulties that may stand in the way of some of those schemes—where those schemes go ahead, they have done so on the basis of our Planning and Infrastructure Act. That means full scrutiny and consultation, full arrangements for remediation and a full consideration of what, among other things, the cumulative effect on the landscape may turn out to be.

With that, I hope I have addressed the points made by most noble Lords. If I have failed to do that because of time constraints, I am happy to write, particularly to the noble Lord, Lord Howell, to go a little further on the question of hydrogen for the future. I can assure him that it plays a very substantial role in the process, along with other non-variable things such as biomethane and biogas, for the future of the energy economy.

Overall, the Government are doing a responsible job in trying to match the requirements of the clean power action plan with quality of life and the future, particularly of rural communities. We will certainly continue to take that very carefully into consideration as the plan develops and, indeed, as clean power goes beyond 2030 and into the next decades.

Low-carbon Heat Networks

Lord Whitehead Excerpts

Wednesday 22nd April 2026 Lords Chamber

[Baroness Griffin of Princethorpe (Lab)]

My Lords, on behalf of my noble friend Lady Curran, and with her permission, I beg leave to ask the Question standing in her name on the Order Paper.

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

The warm homes plan sets a new, ambitious target for heat network growth to meet 7% of heat demand by 2035 and an even greater amount by 2050. This ensures that households and businesses in dense areas can benefit from the cheapest clean heat for them, and that we are maximising the efficiency of our energy system. Alongside our other capital schemes, this Government will invest £1 billion in low-carbon heat networks over this Parliament, including through the green heat network fund and the heat network efficiency scheme. Heat network zoning will fundamentally transform the development of new heat networks in England; it will provide the tools to ensure that they are built in the right places, and give investors and developers the certainty they need to bring forward more ambitious schemes.

[Baroness Griffin of Princethorpe (Lab)]

I thank my noble friend the Minister and welcome the warm homes plan, but we need ambition. Only infrastructure heats homes. Clean, low-carbon heat networks can match gas boiler costs. Instead of every house having its own gas boiler, you have one central source of heat—a big heat pump, a river, a disused coal mine or even a data centre—and you pipe that heat through insulated underground pipes to thousands of homes. I ask my noble friend: when do the Government intend to treat heat networks as essential national infrastructure?

[Lord Whitehead (Lab)]

My noble friend is absolutely right about the importance, cheapness and flexibility of heat networks for the future. Indeed, the Government are taking that flexibility—that essential nature—of heat networks very seriously in their ambitions for them to provide something like 20% of total heat by 2050. Among other things, the Government are doing that through the green heat network fund, to bring forward investment, and to make sure, through the heat network efficiency scheme, that existing heat networks are brought up to scratch with the newer ones that are coming on stream.

[Earl Russell (LD)]

My Lords, we welcome the Statement made yesterday by the Energy Secretary that the Government will be working to accelerate the £15 billion warm homes plan. We support the work that the Government are doing on heat networks but, in light of the current energy crisis, what further work will be done to accelerate the rollout of heat networks, particularly for social housing, to ensure that those in fuel poverty get the help that they need as urgently as possible?

[Lord Whitehead (Lab)]

The noble Earl is quite right to emphasise how important it is to accelerate the rollout of heat networks, particularly in view of the present gas volatility crisis. As has already been mentioned, heat networks can source their heat from anywhere. For many years Southampton heat network, if I dare mention it, has sourced its heat from geothermal energy. There are many other heat networks that can source heat from waste heat, mine heat and, as has also been mentioned, the future heat from data centres. So the customer greatly benefits from having access to heat that otherwise would not be accessible so far as a home is concerned. That is why we are determined to push forward with heat networks as fast as we can, and to make sure that the target—that is, 20% of heat from networks as a portion of heat overall—is achieved in very good time.

[Lord Porter of Spalding (Con)]

My Lords, what risk assessment did the Government undertake before they moved the regulation of social housing landlords’ heating networks from the Housing Ombudsman to Ofgem? The result is that Ofgem can launch unlimited fines based on annual turnover: this will create a push for the big social landlords to take out heat networks, not put them in. At the moment they are controlled by fines levied by the ombudsman, and these are considerably lower than those Ofgem will be able to raise against them.

[Lord Whitehead (Lab)]

The regulations came in on 27 January, and this move to properly regulate the heat network field was due to the fact that the system had very little overall regulation before and was dependent on some voluntary heat regulation schemes. In many instances it was not satisfactory so far as consumers were concerned. The emphasis on the regulation was a fair deal for consumers, but it also means a fair deal for those good heat network operators which want to play by the rules and make sure that their heat networks are as good as they can be.

[Baroness Hayman (CB)]

My Lords, I declare an interest as a director of Peers for the Planet. Like others, I welcome the publication of the Warm Homes Plan and the increased target for the initiation of low-carbon heat networks. But I ask the Minister: what plans do the Government have to ensure that we have a trained and efficient workforce able to carry through these plans? We have had many energy-efficiency and insulation plans in the past that have foundered because we have not had the workforce able to implement them.

[Lord Whitehead (Lab)]

The noble Baroness makes an excellent point on the need to run the expansion of facilities such as heat networks, and indeed many other green and low-carbon technologies, alongside an assurance that the skills are available to put those into place and the workforce is available to do those things. That is part of the wider government plan to make sure that training and skills are properly matched to the low-carbon future that we have in front of us, rather than training people for, dare I say, obsolete technologies that will have a relatively short life in the future and will be superseded by this widespread series of low-carbon technologies.

[Lord Moynihan (Con)]

My Lords, low-carbon heat networks, while commendable, face major disadvantages and risks, including financial risks, technical challenges in retrofitting, and operational challenges such as overheating and service outages. Do the Government really believe that, given local authority financing constraints, councils such as Lewisham—where my former constituency lies—can meet the targets set by government for 2035, and indeed the targets for 2030 set by Lewisham Council?

[Lord Whitehead (Lab)]

Yes, the Government believe that those targets can be met, and local authorities up and down the country have shown, by activities in their own areas, that they are very keen to make sure that those targets are met. Following earlier requests for expressions of interest, the applications for heat networks have shown that there is enormous interest in developing heat networks in various parts of the country—interest led not only by local authorities but by various local communities, including possible interest in the Great British Energy plan to develop 1,000 local schemes by the end of this Parliament. The will to do it is there; we need to make sure that there is the support for these new developments as they go forward, so that the schemes can come forward in the best way possible.

[Lord Grantchester (Lab)]

My Lords, the decarbonisation of heat remains one of the biggest challenges to achieving net zero, and heat networks are a new growth opportunity. Is it not anomalous that there are no decarbonisation requirements on non-domestic buildings? I agree with my noble friend the Minister and his confidence. Could the public sector take a lead on this, with local authorities being resourced to implement heat network zoning to encourage heat connection and supply to suitable buildings at competitive prices?

[Lord Whitehead (Lab)]

The heat network zoning arrangements now in place are not just for purely domestic heat networks. To refer again to a particular heat network I am familiar with, that is a heat network that includes both residential domestic housing and a number of commercial and industrial properties. Ensuring that that heat zoning takes account, as far as it can, of the opportunities for heat networks to operate for commercial and industrial buildings, as well as residential properties, is clearly a substantial part of that move and will shape how heat networks develop in future years.

Electricity: Domestic Pricing

Lord Whitehead Excerpts

Tuesday 21st April 2026 Lords Chamber

[Lord McCabe]

To ask His Majesty’s Government what plans they have to review the effect of the marginal pricing structure on the cost of electricity for domestic consumers.

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

Delivering lower bills and a secure energy supply for working families and businesses is at the heart of the Government’s sprint toward homegrown clean energy. Marginal cost pricing has historically incentivised the cheapest forms of energy to provide as much power as possible. That worked well when the competition was between fossil fuel producers, but less well when there are many cheaper bids from renewable sources for power supply but still the price can be set by more expensive and volatile gas. Accelerating the development of renewable generation, as we are now through clean power 2030, will progressively reduce to a residuum the amount of time that gas sets the price.

[Lord McCabe (Lab)]

I am grateful for that Answer and I welcome the direction of travel on energy security and price stability, but do we not need to work harder and faster to decouple gas from electricity prices? Is it not true that gas accounts for about 30% of electricity generating but that the effect of gas on the price mechanism is responsible for the huge bills landing on households and businesses up and down the country?

[Lord Whitehead (Lab)]

My noble friend is absolutely right. Although gas accounts for only 30% or so of the market, at the moment it sets the price over 60% of the time with marginal cost pricing arrangements. It is right that we need to go faster and further. Indeed, today the Government have announced plans, among many other things, to ensure that the element of the renewable input into the system—on renewables obligations rather than fixed-price contracts for difference—can be moved over to that latter category as soon as possible, thereby bearing down on the amount of time that gas sets the price in the market.

[Earl Russell (LD)]

My Lords, we cannot afford continued fossil fuel dependency. We welcome the move from legacy contracts to cheaper ones. Indeed, my party proposed similar over a year ago. I support the Greenpeace Power Shift RAB model to remove gas, the most expensive component, from the market. Are Ministers still looking at these proposals, and will they take them forward? If not, why not? Together these proposals fall short, and that is my worry here. Despite the way they have been trailed, they will not deliver the savings we require.

--- Later in debate ---

[Lord Whitehead (Lab)]

The Government are looking actively at many different ways of going further and faster as far as the green energy revolution is concerned. Indeed, they are actively looking at the Greenpeace and Stonehaven report on not only delinking but strategic reserves for gas in future. My personal view is that what they are proposing is a little early in the cycle but, nevertheless, could be an important element later on, in how the system stabilises itself once it is mainly renewables and low carbon.

[Lord Redwood (Con)]

Is the quickest way to get energy prices down not to cut some of the rip-off taxes that the Government impose? How does imposing an extra windfall tax help?

[Lord Whitehead (Lab)]

Imposing an extra windfall tax, on those elements of the system that are within the renewables orbit but outside the CfD arrangements, takes away the excess profits that those elements make as a result of being aligned with gas in charging those volatile prices. So it is a very sensible thing to do, to make sure that excess profits are not taken from consumers but instead reside with them as lower prices.

[Lord Vaux of Harrowden (CB)]

To follow up on that, can the Minister explain how a windfall tax paid to the Treasury ends up reducing people’s bills?

[Lord Whitehead (Lab)]

The effect of the windfall tax is, essentially, to start returning some of those excessive bill contributions back to bill payers so that their overall bills are less than they otherwise would be.

[Baroness McIntosh of Pickering (Con)]

My Lords, does the Minister not agree that Denmark—where renewables, on which Denmark excels, are highly developed—is the largest producer of oil and gas in the European Union? We will continue to need fossil fuels, in addition to renewables, going forward.

[Lord Whitehead (Lab)]

The reference that the noble Baroness makes to Denmark is an interesting one, inasmuch as the Danish system is wholly integrated between renewables, heat and power of different kinds—particularly district heating and various such things, which can be used in conjunction with other forms of energy to provide a balanced overall system. It is true that Denmark continues to produce oil and gas but also that Denmark is, along with the UK, looking at methods of making sure that relates to production for the future rather than exploration.

[Lord Grantchester (Lab)]

My Lords, this is one aspect of the high cost of electricity in the UK. The wider question it raises is: what plans do the Government have to reduce the cost of electricity? On the electrification of the energy mix of the future, which is among the many answers that my noble friend the Minister may wish to give, do the Government need to consider bringing forward a strategic national plan with a focus on the lessons to be learned from this present crisis?

--- Later in debate ---

[Lord Whitehead (Lab)]

I thank my noble friend for that question, because he has, remarkably, just anticipated the development of the strategic spatial energy plan and a reformed national pricing delivery plan, both of which came out this morning. Both plans address exactly the longer-term balance arrangements as far as electricity is concerned, particularly how prices can be the lowest possible for the deployment of electricity and gas resources across the country.

[Lord Teverson (LD)]

My Lords, the most effective way of bringing down household energy bills is through the energy efficiency of homes. I welcome the Government’s move to apply the future homes standard, which will bring up energy efficiency, but they are not going to implement it until 2028—before which, some 100,000 or more homes will be built inefficiently. Can the Government please bring this forward, at least to 2027?

[Lord Whitehead (Lab)]

I thank the noble Lord for that question. I cannot stand here and guarantee that that move will be brought forward by one year, as he suggests. It is a very sound idea. The future homes standard, which is now in place, is instead of the net-zero low-carbon standards that should have been implemented about 15 years ago, if the previous Government had not thrown them out. We are catching back up, as far as possible, and making sure we can get that done in good order.

[Lord Moynihan (Con)]

My Lords, by our doubling down on intermittent renewable wind and imported Chinese solar, as the Secretary of State announced this morning, does the Minister agree that while the wholesale price link to gas and electricity constitutes, as he said, only some 30% of the consumer price, the main culprits of ever-escalating industrial and domestic prices are the Government’s green levies, the taxes and the system costs, which constitute the remaining 70% and are increasing month by month? When will the Government address these costs?

[Lord Whitehead (Lab)]

Of course, the Government have addressed those costs, particularly in the recent move to take elements of the levies away from levy arrangements and into the general Exchequer. That is part of the £150 off energy bills that the Government have recently reported. The noble Lord is absolutely right about the effect of levies on prices, but I hope he will also accept that that is exactly what the Government are doing at the moment: bringing prices down for the consumer by transferring how those levies work for the future.

[The Earl of Clancarty (CB)]

My Lords, it is good news that the Government have enabled standing charges to be reduced, but should standing charges not be got rid of completely? They are basically daylight robbery.

[Lord Whitehead (Lab)]

The noble Earl treads a fine distinction between the possible daylight robbery of standing charges and the fact that some charges need to be levied collectively because of the various fixed costs that the system has, which have to be contributed to in order to deliver the service to individual consumers. How you charge those standing charges is a matter of considerable debate and something that the Government are looking at. Whether, for example, you charge them as an overall fixed sum or as a sum per household, depending on its energy bills, is a matter of considerable debate at the moment. The idea that standing charges should relate more exactly to what standing charges should be for in the first place is a point well made.

Data Centres: Energy Demand

Lord Whitehead Excerpts

Thursday 16th April 2026 Lords Chamber

[Earl Russell]

To ask His Majesty’s Government what steps they are taking to ensure that projected increases in energy demand from data centres do not compromise the achievement of their targets for clean power by 2030 and for net zero by 2050.

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

My Lords, the Government recognise that Great British electricity demand is expected to grow significantly, driven in part by advances in AI. We are clear that this growth must not prevent delivery of clean power by 2030 and net zero by 2050. The Government are working to ensure data centre energy demand supports a flexible, resilient and increasingly low-carbon electricity system, including through smarter siting, improved use of existing clean generation and more efficient use of power. Importantly, evidence has shown that AI will support emissions reduction across the economy through improved efficiency and system optimisation, potentially outweighing additional electricity demand.

[Earl Russell (LD)]

My Lords, with Ofgem warning that proposed data centres are seeking 50 gigawatts, exceeding our current peak demand, my view is that, as yet, inadequate assessments have been made by government and regulators of AI’s climate impacts. Does the Minister agree that it is unacceptable merely to believe that this demand is compatible with clean power and our net-zero targets? I ask the Minister to commit to a NESO standing forecast for AI’s electricity use and to ongoing direct contact between government and the Climate Change Committee on data centres.

[Lord Whitehead (Lab)]

I completely agree with the noble Earl that merely believing that it is all going to be okay and that we can easily absorb all these additional demands on the energy sector without doing anything else is, at least, a folly. That is why the Government are taking substantial steps, for example through the AI growth zones, to make sure that we plan where data centres will be and make sure that those data centres are as closely aligned as possible with sources of either optimised electricity or constrained electricity or with new sources of energy production, so that the AI data centre development is not a burden on the system but an addition to it.

[Lord Geddes (Con)]

My Lords, remounting my favourite hobby horse, can I ask: when will the Government give increased support for tidal power, which, unlike wind and solar, never runs out?

[Lord Whitehead (Lab)]

I welcome that question from the noble Lord. This is an issue that is quite close to my heart, and I recently visited the Liverpool tidal barrage scheme to see how it is doing. I personally am committed to developing tidal power, both tidal stream and tidal range, but there is still some way to go in working out how that can be value for money and can be supported through various longer-term methods of support because of the long life that tidal range in particular has in front of it.

[Lord Wigley (PC)]

My Lords, does the Minister accept that the most economic way of meeting such peak demand from clean sources is rapidly to accelerate the programme for building hydro pump storage schemes? There are a number that are ready to go in Wales and Scotland. They are clearly economic, using electricity generated cheaply at night to augment peak availability, so please, please, please will the Government get on with it?

[Lord Whitehead (Lab)]

I agree with the noble Lord that pumped hydro schemes are one method of ensuring that electricity is used as efficiently as it can be in terms of taking it in at some stages of the cycle and releasing it at others. A number of other arrangements can do that, such as batteries and other forms of long-term storage—compressed air, for example—all of which will be a substantial part of the battery of systems to optimise the electricity production of the country as AI develops.

[Lord Alton of Liverpool (CB)]

My Lords, when the Minister last answered on this question, he was good enough to talk about the problem of using Uyghur slave labour in the manufacture of solar panels. He promised to write to me, and I am grateful to him for following up that promise. In that letter, he said that he would inform the Joint Committee on Human Rights by July of the measures that Great British Energy is taking to eliminate the use of slave labour. Will he comment on what he said about the need for a review of the 2015 modern slavery legislation that the noble Baroness, Lady May, who introduced that legislation, has called for, not least Section 56 of the 2015 Act, and how he intends the review of that legislation, which he mentions in the letter, to take place?

[Lord Whitehead (Lab)]

I have a feeling that the noble Lord will shortly be in receipt of a further letter from me on this subject. It is the case that the Modern Slavery Act, particularly in terms of a number of the concerns that have been raised about the more offset arrangements as far as modern slavery is concerned, needs some uprating. That is being considered, but as to some of his further points, I think I will need to write to him further.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, will my noble friend confirm that new nuclear is important, in terms of both data centres and our clean energy programme? Will he confirm that the only way we can get new nuclear at places such as Hunterston in East Lothian, where we currently have a nuclear power station, which is much needed in Scotland, is if on 7 May we get rid of the incompetent SNP Administration?

[Lord Whitehead (Lab)]

I have lots of reasons to agree with my noble friend about particular Administrations and how they might be replaced. As far as the future of AI nuclear is concerned, it is certainly the case that new nuclear can sit very well alongside, for example, AI growth zones. One example of that is the Wylfa area, where the contract for a new SMR has just been signed, which will also be an AI growth zone where a number of data centres can establish themselves and directly use the power coming from that new SMR on that site.

[Lord Moynihan (Con)]

My Lords, given that the environmental footprint is rightly central to the Government’s net zero policy, what is their reason for not opening the North Sea to a new licence round tied to long-term take-or-pay contracts to power new data centres, for example, when the average carbon intensity of the North Sea is 24 kilograms per barrel of oil, Jackdaw is 8 and imported LNG from the United States is 85 kilograms of carbon intensity? What is the Government’s rationale for not developing our own reserves rather than importing LNG, at the expense of energy security, with an environmental impact four times more polluting than developing our reserves in the North Sea?

[Lord Whitehead (Lab)]

I am afraid the noble Lord is back on his fairly standard topic. As far as AI is concerned, we ought to bear in mind that clean power already represents 73.7% of GB electricity generation and we are targeting clean power providing at least 95% of that power by 2030 or so. Importing a lot more gas to deal with the introduction of AI does not necessarily follow, because it is really a question of using that clean power in the most optimised way possible to make sure that AI is supported, so his thesis does not quite stack up.

[Baroness Sheehan (LD)]

My Lords, what requirements will be put in place to ensure that energy efficiency and waste heat recovery measures are implemented?

--- Later in debate ---

[Lord Whitehead (Lab)]

The noble Baroness mentions waste heat and electricity waste, and that is precisely the sort of area that needs to be optimised in terms of making sure that we can deal with this growth in AI without building huge new resources. It is by optimising the system that we can get quite a lot of this new requirement over the line. For example, the introduction—interestingly, using AI—of dynamic line rating allows cables to work at a much higher rate much closer to their thermal capacity because of the ability of AI to predict what that line is going to do as opposed to the lower rating that they are on at the moment. That could produce up to a 50% gain in capacity for those lines. The same goes with a lot of things concerning waste heat.

Energy Prices Act 2022 (Extension of Time Limit) Regulations 2026

Lord Whitehead Excerpts

Thursday 16th April 2026 Lords Chamber

Moved by

[Lord Whitehead]

That the draft Regulations laid before the House on 23 February be approved.

Relevant document: 54th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 13 April.

Motion agreed.

Energy Prices Act 2022 (Extension of Time Limit) Regulations 2026

Lord Whitehead Excerpts

Monday 13th April 2026 Grand Committee

Moved by

[Lord Whitehead]

That the Grand Committee do consider the Energy Prices Act 2022 (Extension of Time Limit) Regulations 2026.

Relevant document: 54th Report from the Secondary Legislation Scrutiny Committee

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

My Lords, these draft regulations were laid before the House on 23 February and consist of an extremely short SI—six lines altogether—and a very slight amendment of a date from 25 April 2026 to 25 October 2026. I am sure noble Lords will be eager to know why that change of date is being undertaken. On 1 April, typical household energy bills reduced by more than £100, thanks to action this Government took following the Budget. Energy bills are lower than they were in March because of the choices made by the Chancellor last year. They will remain capped at this level until July.

I want to be clear what lies behind the reduction in energy bills from 1 April. First, we have taken the considered decision to bring the energy company obligation scheme to a close, removing its costs from bills and instead funding future energy efficiency home upgrades via public investment in the warm homes plan. Secondly, we are moving 75% of the cost of the renewables obligation scheme attributable to domestic energy supply to the Exchequer. These principled reforms shift the balance from levies on bills to public spending. These regulations support that reduction in energy bills by ensuring that the Government retain the necessary power for the renewables obligation cost transfer.

The renewables obligation scheme exists to incentivise UK renewable energy generation through a system of tradeable certificates. The scheme closed to new applications in 2017, but existing sites can continue to receive support until the scheme ends in 2037. The scheme has been instrumental in taking a nascent renewable energy sector to where it is today, with the scheme supporting around 30% of total UK electricity generation. The core of the renewables obligation scheme is a process in which electricity suppliers purchase certificates from renewable generators. This process continues unchanged.

However, previously, suppliers ultimately recovered the cost of complying with their renewable obligations from customers via energy bills. Ofgem considered these costs when setting the quarterly price cap for domestic consumers in Great Britain. From 1 April, the Government are instead providing grant funding to electricity suppliers to cover 75% of the cost of these obligations attributable to domestic energy supply in GB. We have given a legal direction to electricity suppliers, requiring them to pass these savings on to domestic consumers. Ofgem has also reflected the reduced cost in the lower price cap from 1 April. At the Budget, we committed to keep these costs off bills until 31 March 2029.

I hope noble Lords will agree that these are good things to do concerning energy price costs and the reduction of customers’ bills. But, of course, there must be a legislative basis for those changes. The legislative basis for the grant funding that enables the energy bill reductions I have mentioned is currently set to expire on 25 April this year. These regulations, as I have mentioned, extend this time limit to ensure that the removal of costs from electricity bills can continue. We can extend the time limit on the legislation—the Energy Prices Act 2022—by only six months at a time. The extension in these regulations is until 25 October, when the Bill is in effect re-sunsetted.

I therefore expect to return to the House in October to seek a further extension on that sunset clause, but I assure noble Lords that the department is working on primary legislation to provide a more permanent solution, which will be taken forward when parliamentary time allows.

The position is slightly different in Northern Ireland, where energy costs are a transferred matter for the Executive, and the Northern Ireland renewables obligation forms a smaller cost on electricity bills. The department has been supporting colleagues in Northern Ireland as they develop an offer comparable to the policy in Great Britain. Following a request from the Minister for the Economy in Northern Ireland, we laid separate regulations in March to support their delivery, which I hope to bring before your Lordships shortly.

In concluding, I thank the Secondary Legislation Scrutiny Committee for noting these regulations as of interest in the context of events in the Middle East, which the department continues to closely monitor.

Energy company obligation costs and 75% of renewables obligation costs have been removed from average domestic energy bills and will stay off bills for at least the next three years. Whatever challenges lie ahead, the Government will prioritise supporting working people with the cost of living. These regulations are ultimately a simple time-limit extension to underpin the removal of these renewables obligation costs from bills. I beg to move.

[Lord Ashcombe (Con)]

My Lords, the Energy Prices Act 2022 was brought forward in circumstances that were, by any measure, extraordinary. It was a moment of acute global volatility, when Governments across Europe were forced to act at speed to shield households and businesses from unprecedented shocks. Those conditions justified exceptional paths but, as we move further away from that crisis moment, it is right to ask whether repeated extensions of emergency measures remain the most appropriate long-term course.

Energy security today is defined not only by the balance of supply and demand over the year but by the system’s resilience at moments of stress. The Government’s own modelling makes clear that peak day gas demand remains high, even as overall annual consumption gradually declines. It is those peaks, on the coldest days, typically when the wind does not blow and the sun does not shine, and the tightest margins that test the system most severely.

In 2024, gas provided 36% of the UK’s energy needs. It is used not only in generating electricity but, importantly, in domestic and industrial heating. Domestic gas production remains a critical component of the UK energy system. In 2024, the UK continental shelf provided 43% of the UK supply, imports of liquid natural gas provided 14% and the balance was imported from Norway. It is more reliable than imported alternatives, which can always be diverted elsewhere—even the Norwegian imports—as Europe becomes ever hungrier for the same molecules. Domestic gas goes into the extensive UK network at significantly lower carbon-emissions intensity—some three times lower—than liquid natural gas, which predominantly comes from the United States, and it is far less exposed to geopolitical risk or global bidding cycles. LNG will remain an important source of flexibility, but it cannot substitute for domestic supply, particularly given the UK’s very limited gas storage capacity.

Maintaining a stable level of domestic production also sustains the essential infrastructure on which the whole system depends: the pipelines, terminals and onshore hubs that provide flexibility, resilience, affordability and, critically at this current time, jobs. Once the infrastructure and experience are lost, they will not easily be rebuilt.

More broadly, there is a strong case for moving from crisis area interventions towards stable, rule-based arrangements. Such an approach would continue to protect consumers when prices spike, while giving investors the confidence needed to support the system in more normal times. That balance between consumer protection and long-term stability is essential if we are to secure an orderly transition and a resilient energy system for the years ahead.

With these points in mind, I would like to pose four questions to the Minister. First, can he outline a clear pathway from the continued use of emergency powers under the Energy Prices Act towards a permanent, price-responsive framework that supports investment and resilience? Secondly, how do the Government intend to ensure that critical gas infrastructure remains viable if domestic production continues to decline? Thirdly, what assessment has been made of the risks associated with greater reliance on LNG imports, particularly in light of the UK’s limited gas storage and exposure to global market volatility? Finally, have the Government considered the carbon implications of increased LNG reliance, given its significantly higher life-cycle emissions compared with UK gas produced here?

--- Later in debate ---

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank the Minister for bringing forward this statutory instrument, which introduces a minor amendment to the Energy Prices Act 2022 by extending the Secretary of State’s power to grant renewables obligation certificate funding by six months.

His Majesty’s Opposition do not oppose this instrument in principle. It is right that the Government’s efforts should be focused on the controllable—namely, policy costs. Indeed, it is welcome that the renewables obligation to Exchequer policy demonstrates the Government’s understanding that their choices have a direct impact on people’s bills; that is why the scheme is being advertised as proof of the £150 that the Government promised to take off energy bills.

However, reducing energy bills by shifting the costs from household bills on to general taxation is a rather disingenuous way of achieving government policy. Whether it is the Government or energy suppliers who pay the upfront fee to Ofgem, the cost of ROCs will still be borne by the public and the cost of renewables will continue to apply. Every time the sun shines, solar farms will receive one or two ROCs per megawatt hour, earning them up to double the wholesale price. Every time the wind blows, offshore wind farms will get almost three times the wholesale price, or £240 per megawatt hour. When these farms are forced to turn off due to insufficient grid capacity, they are in receipt of high-constraint payments of more than £200 per megawatt hour.

The renewables obligation deal will last for another 11 years. These costs are going nowhere, and nobody but the British public is going to fund them. The only result of the RO is to Exchequer policy, and this instrument will mean that the public are made less conscious of what they are funding. Absorbing costs into general government spending may make the cost of the renewables programme more discrete, but it will not save the public purse any money.

The upshot of this is that the renewable transition must be underpinned by a cheaper and more reliable source of energy. The immediate way of achieving this is through oil and gas, which we already manage by importing LNG from Norway and the Middle East. I completely agree with the substance and sentiment of my noble friend Lord Ashcombe’s contribution to this short debate. I am aware that this is not the topic of today’s debate, so I will brief, but the intermittent nature of renewables and our current capacity issues mean that we still need to rely on oil and gas. Even during the current war and the subsequent international spike in oil and gas prices, those prices are still cheaper than subsidised renewables. We have the opportunity to divorce ourselves from the vicissitudes of international affairs by exploiting our North Sea reserves, yet the Secretary of State remains as dogmatic as ever. He seemed to toy with the idea of domestic production over the Easter break but, as we sit here today, production at Jackdaw is still yet to commence.

This is in the Government’s control. If they really are committed to reducing energy bills, then, along with subsidising renewables in the long term, they should allow us to produce our own oil and gas in the short term. I hope that the Minister will at least agree with that sentiment; I look forward to his response, in particular to the four intelligent questions posed by my noble friend Lord Ashcombe.

[Lord Whitehead (Lab)]

My Lords, I thank noble Lords for their valuable contributions to this debate. I will try to respond to their concerns—including those of the noble Lord, Lord Ashcombe, who went a bit beyond this particular SI but nevertheless made important points and asked questions that deserve a response.

The noble Lord’s first concern was about whether I can outline a pathway towards permanent legislation here. I agree with him that permanent legislation is always better than re-sunsetting an original sunset clause from previous legislation, as he mentioned. Of course, the Energy Prices Act 2022 was put in place at a time of high crisis as far as energy bills were concerned—not completely dissimilar issues to the ones we face today, but rather more concerned with gas than with oil and fuel generally. Nevertheless, it is a piece of legislation that was designed at least in part to be sunsetted. In essence, what we are doing in this present crisis is re-sunsetting an Act that was originally intended to be sunsetted in the first place. It is quite right that we should bring that sunset request back to the House when we are making it.

Nevertheless, it is a much better idea to have legislation that properly fits the bill in the long term, which is the Government’s intention right now. I mentioned that we will probably want to come back one more time with a sunset extension, in order to make sure that these changes work properly in the long term, but, after that, there should be legislation in place to make a permanent arrangement that is properly workable for the future. Of course, the phrase “when legislative time permits” has a variety of interpretations attached to it, but it is basically a question of finding out to which bit of legislation you can attach this permanent version of a sunset clause. It might be the EIB, but there may be other legislation—we will have to see as we go forward. However, I can give an absolute commitment that we are dedicated to making sure that this happens in the not-too-distant future in order to regularise the circumstances over the longer term.

The noble Lord asked what we are doing to make sure that critical gas infrastructure remains viable. This is a subset of the understanding that, although the use of gas is declining substantially in Great Britain and will continue to do so, the overhead costs and infrastructure issues will remain. It is essential, therefore, that we make sure that the infrastructure is as viable as it can be in the long term and that the whole system does not fall down because we have a lower amount of gas going into and out of it. The Government are actively involved in undertaking that.

By the way, I might add that the increasing amount of biomethane and biogas going into the system—at present, it is about 7% of the total system—will go some way towards assisting the viability of long-term infrastructure. It is certainly this Government’s intention to increase, where possible, the amount of biomethane and biogas going into the system. That gives some indication of where we are on LNG imports, which, as the noble Lord mentioned, have a higher carbon footprint than natural gas, which in turn has a much higher footprint than biogas. At the moment, about 14% of our gas supplies are coming in via LNG. One of the advantages of an increased amount of biogas in the system is that it directly removes the need for LNG to come into the system. All other things considered, something like a 2% increase in biomethane going into the system would be the equivalent of turning around six LNG tankers and them not coming to UK shores at all.

On energy imports in general, the UK has a diverse supply. The noble Lord mentioned the substantial element of supply played by the Norwegian gas fields, some of which are landable only in the UK and not in Norway itself. There is also the continuing supply from the North Sea. I have mentioned LNG, which comes from diverse sources; at the moment, only 1% comes from sources in the Middle East, so that issue will not overturn the security of the gas system in the near future. I hope that I have given fair thought to the noble Lord’s valuable contribution.

I turn to the supportive and helpful contribution of the noble Earl, Lord Russell. He is right to add that this is the right thing to do right now, bearing in mind that we very much want to make sure that, in a time of such volatility, domestic and commercial bills are pressed downwards as far as is possible. The two measures I have mentioned rearrange the ways in which bills are charged to some extent, but they nevertheless have the real effect of bringing those bills down considerably. He is quite right to seek an assurance that that is not just a temporary fix for the time being but will be put on a more permanent basis; we are looking to secure legislation to make sure that that happens.

The noble Earl rightly mentioned information sharing on these measures and other measures that are likely coming forward to push down bills. He should be aware of the Utilities Act 2000 (Amendment of Section 105) Order, which has enabled the sharing of more detailed data than DESNZ currently holds between the department and Ofgem. The aim of that order is to ensure that more detailed data is properly safeguarded and is used for the intended purposes, not others. I hope that the noble Earl can be reassured on that basis.

I turn to the valuable contribution of the noble Baroness, Lady Bloomfield. It is true that these measures shift the burden of the legislation from particular consumers to more general taxation purposes. That is a fair thing to do, in terms of generally sharing the burden of increased electricity prices, but I accept that the Government are very much involved in making sure that, by changing the way the electricity market works, prices are much lower over a longer period of time.

Warm Home Discount (England and Wales) Regulations 2026

Lord Whitehead Excerpts

Wednesday 25th March 2026 Lords Chamber

Moved by

[Lord Whitehead]

That the draft Regulations laid before the House on 2 and 5 February be approved.

Considered in Grand Committee on 23 March.

Motions agreed.

Fuel Supplies: War in Iran

Lord Whitehead Excerpts

Wednesday 25th March 2026 Lords Chamber

[Lord John of Southwark]

To ask His Majesty’s Government what plans they have to ensure the continuity of fuel supplies in the light of the war in Iran.

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

The UK benefits from a strong and diverse fuel supply. The fuel supply industry has been clear that fuel production and imports continue as usual. The Government continue to monitor the situation closely and will act if necessary. The essential lesson of this conflict, however, is that while we are dependent on fossil fuel markets, we are exposed to volatile prices. The answer must be to go further and faster towards homegrown clean power that we control.

[Lord John of Southwark (Lab)]

I thank my noble friend for his Answer. Two matters prompted my Question: first, reports that 20% of the world’s oil supply passes through the Strait of Hormuz, and, secondly, reports at the weekend and since that the UK has only four weeks of fuel supplies in reserve. Given that, can he tell me how much of the UK’s supply is dependent on the oil that passes through the Strait of Hormuz? If current disruptions to worldwide oil supplies continue, how long will it be before the Government are forced to introduce restrictions on or rationing of fuel supplies?

[Lord Whitehead (Lab)]

I thank my noble friend for his question. His first statistic is correct. His second statistic, not that it is necessarily one that has his support, is categorically untrue—it is categorically untrue that there are only four weeks of fuel supply in the UK. However, the Government are closely monitoring the situation to ensure that supplies remain resilient. The UK remains a net exporter of petrol, with domestic capacity sufficiently filling this demand, while diesel volumes are met mostly by domestic production and imports from trusted partners. Only a small percentage is obtained from the Middle East. The majority of crude oil used for UK production comes from the United States and Norway, with just 1% from the Middle East. The UK obtains a proportion of jet fuel from the Middle East, but the fuel supply industry has been clear that fuel production imports are continuing across the UK as usual.

[Lord Carlile of Berriew (CB)]

My Lords, I declare my interest as part of a consultancy that provides geopolitics analysis to the Government of Qatar. Does the Minister agree that the continuity of fuel supplies may involve negotiations with those who have de facto control of the Strait of Hormuz rather than with those whom we wish had control of the Strait of Hormuz?

[Lord Whitehead (Lab)]

The issue of fuel supply through the Strait of Hormuz is relative to world supply and world prices; that is, because the UK obtains only a very small proportion of its supplies from the Middle East, the effect is more likely to be on prices across the world as other people seek to make up their supplies from different sources. The noble Lord is right that how we clear the Strait of Hormuz for those supplies has to be a question of disengagement, détente in the present conflict, and negotiation not in an ideal world but with those with whom we find ourselves in a negotiating position.

[Lord Redwood (Con)]

My Lords, do the Government understand that they have already presided over the closure of two of our oil refineries with their high-carbon taxes and unfriendly energy policy? Will they take urgent action to avoid the closure of the remaining ones, which would leave us without domestic supply and with shortages?

[Lord Whitehead (Lab)]

The noble Lord will not be surprised to hear that I do not agree with his analysis of why the two refineries that have closed in the UK have done so, but the four refineries that we have in the UK are all producing well and in a robust condition. The Government will continue to monitor that process, but there is no reason to believe that further refineries are likely to close in the near future.

[Earl Russell (LD)]

My Lords, does the Minister agree that while the conflict with Iran has driven up oil and gas prices, this is not currently a fuel supply crisis, and motorists and households should therefore continue to purchase fuel and gas as usual? If the conflict persists and international supplies are further disrupted, what steps are being considered to safeguard aviation fuel supply and to prevent significant increases in aviation fuel prices in the longer term as we head towards the summer?

[Lord Whitehead (Lab)]

The noble Earl is right; this is currently, in essence, a price crisis and not a supply crisis. That will remain the case for quite a long time, depending on how long the war continues. If the war continues for a very long time, there obviously will be issues not necessarily of supply to the UK but offset issues relating to other people trying to eat the UK’s lunch, as it were, in their quest for supplies elsewhere in the world. The Government have already taken action in terms of taking part in the IEA’s release of substantial amounts of oil to make sure that that does not happen in the medium term and co-ordinating with efforts internationally to make sure that jet fuel, for example, is available on a world basis. Aircraft and other companies in that field hedge their supplies very long in advance, and therefore this is not an issue for the immediate future.

[Lord Harris of Haringey (Lab)]

My Lords, I refer to my interest as declared in the register as chair of the National Preparedness Commission. It is not just oil that passes through the Strait of Hormuz. A third of global trade in fertiliser passes through the strait. I appreciate that this is not immediately within my noble friend the Minister’s portfolio, so if he does not have the information in his folder, perhaps he can write to me and place a copy in the Library, but what consideration is being given across government to the implications for farmers in this country but more particularly for global farming and long-term food supplies if this disruption continues?

[Lord Whitehead (Lab)]

My noble friend is right that this does not fall within my brief particularly, but I do know a bit about the subject he is raising, which is synthetic ammonia supplies from the Middle East. We do not have ammonia production in this country at the moment, so there is potentially a long-term issue of ammonia supplies coming into the UK and into a lot of other countries across the world, as my noble friend mentioned. Part of the solution is to go for different sources of ammonia which are not synthetic, particularly green ammonia and other forms of fertiliser such as digestate, which can fulfil substantially the role played by ammonia in the farming cycle.

[Lord Howell of Guildford (Con)]

My Lords, I am not sure that any of the figures we have heard in the last few minutes are correct or substantial. In fact, there is a huge amount around the world of spare oil capacity and oil production potential which can be and is being brought into play. There is the vast boost in American shale, obviously, from which we get a lot already. There are the reserves which have been released under the scheme which I chaired in 1979 at the IEA, and those reserves are only a small part of more reserves that can be developed at any time we wish. There are pipelines which bypass the Strait of Hormuz. All I am saying is that the situation can be overexcited by an ill-informed media. Does the Minister agree that we should be careful not to excite these dangers and realise that this is a manageable situation if we take a strong line on what can be done to reopen the Strait of Hormuz when we can and in the meantime do not get so worked up that everyone starts talking about rationing and other idiotic ideas?

[Lord Whitehead (Lab)]

I hope the noble Lord does not consider that the figures and other facts that I have presented this afternoon are all erroneous, because I assure him that they are not, but he is right to say that this is not a question just of whether stuff goes through the Strait of Hormuz or nothing. There are a great many other ways in which oil, petroleum products, gas and so on can be taken from their source to where they want to go without going through the Strait of Hormuz. For example, pipelines across Arabia are already beginning to take some of the oil that otherwise would go through the Strait of Hormuz out to port, and the same is true with gas supplies. It is not all about LNG coming in vessels going through the Strait of Hormuz. I totally agree with the noble Lord that we should not be too taken up by overexcitable, ill-informed press speculation but should concentrate on the real facts and the real opportunities that there are to gather ourselves a sustainable oil and gas supply, which also includes making sure that as much as possible of our energy supply comes from home sources in the medium and long term.

Onshore Wind Farms

Lord Whitehead Excerpts

Monday 23rd March 2026 Lords Chamber

[Lord Teverson]

To ask His Majesty’s Government what steps they are taking to facilitate the repowering of onshore wind farms.

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

The Government recognise the importance of repowering to maximise the benefits from our existing fleet of turbines. We are working to remove barriers in the planning system to accelerate repowering and undertaking updates to planning policy in England. In addition, the Government have announced changes to enable repowered onshore wind projects that meet eligibility criteria to bid into the contracts for difference scheme from allocation round 7 onwards.

[Lord Teverson (LD)]

My Lords, I welcome the Minister’s positive reply. There are some 200 wind farm sites coming up for operational termination by 2030—some 3 megawatts of power. If we managed to repower those, we could have an additional 2 gigawatts without having new sites. That clearly makes sense. Will the Government strengthen the planning guidance for repowering, as the Minister has indicated, because that gets in the way, and will he integrate repowering into the strategic energy spatial plan? It is obvious—come on, let’s do it.

[Lord Whitehead (Lab)]

The Government are already undertaking changes to planning arrangements to make sure that schemes can proceed faster and more immediately. In the case of repowering, that is obviously the difference between having to treat a scheme as a brand new development and one that can proceed very quickly, with the necessary consents in place.

[Baroness McIntosh of Pickering (Con)]

Will the Government consider very carefully the cumulative impact of the repowering of overhead powerlines in conjunction with onshore wind farms? Does the Minister not see that it is creeping urbanisation of the countryside, which should be avoided at all costs? At the very least, we should use the electricity generated in that way locally, so that it is not transmitted the length of the country through overhead power lines.

--- Later in debate ---

[Lord Whitehead (Lab)]

I had thought that I was talking this afternoon about the repowering of wind turbines—that is, turbines that have completed their life in terms of their original blades and mountings, and which are out of the renewable obligation certificate period. The question for those sites is whether they repower, go merchant or close down. That is what the Question was about, but obviously, the issue of cable repowering is more about ensuring that the cables we have across the country can carry the new loads that we hope will be within their capability for the future. That is really a question of making sure that it is done in the most environmentally friendly way possible, but at the same time moving at considerable speed by changing the planning regulations as fast as possible.

[Lord Lennie (Lab)]

The planning presumption during the Tories’ 14 years in power was that if a single objector objected to an onshore power plant, it was rejected automatically. Can the noble Lord say whether the planning presumption will change in favour of onshore power plants rather than against them?

[Lord Whitehead (Lab)]

Well indeed. The first thing, literally, that the Department for Energy Security and Net Zero did upon the Labour Government taking office was to remove the ban on onshore wind and make sure that it could in future play a full part in the development of UK wind, as we have begun to see in the allocation rounds. It is a crying shame that onshore was effectively banned for such a long time and is only now recovering.

[Lord Morse (CB)]

My Lords, is the Minister aware of the deep anger and enduring resentment felt about the way in which the heritage coast of Suffolk, an area of outstanding natural beauty, is being laid waste by the enormous mess of both rebuilding Sizewell and bringing onshore a series of ill-reconciled offshore programmes? This annoyance is added to by the dismissal of many of the points being made in consultation as nimbyism. Are we going to have a similar performance with onshore power?

[Lord Whitehead (Lab)]

I am sure we will not, because onshore power, like offshore power and all other forms of renewable power, has to abide by planning guidelines and guidance and has to fit in well with all the environmental considerations that are being put forward. There will be no change in that requirement; it is just that with the speeding up of some of those processes, onshore wind, where it is requested and where it fits all those requirements, can proceed very quickly.

[Lord Swire (Con)]

My Lords, why are the Government so steadfast in their refusal to have a proper, open debate about the relative benefits, environmental and otherwise, of burying power lines as opposed to having overhead power lines? This is not an argument that is going to go away. It is about time the Government fessed up on this and stopped relying on hugely inflated figures provided by the national grid.

[Lord Whitehead (Lab)]

I am slightly puzzled by the noble Lord’s enunciation of that question, in that renewable wind and overhead power lines go closely together, because the overhead power lines have to deliver the power that is being generated by the renewable power sources. As for the requirement that that variable output be matched by various other sources of energy when, for example, the wind is not blowing and the sun is not shining, that is well taken care of by the back-up that is already in the system—due, I might add, to a number of renewable sources also being non-variable.

[Baroness Hayman (CB)]

My Lords, I declare my interest as a director of Peers for the Planet. Given what the noble Lord, Lord Teverson, said, in asking this Question, about the increased productivity of onshore wind when it is a replacement for existing infrastructure, is it not time that the Government did as he said and got on with it? I remind the Minister that the urgency of coming to conclusions on repowering existing onshore wind was included in the Private Member’s Bill that I introduced in your Lordships’ House some five years ago.

[Lord Whitehead (Lab)]

I pay tribute to the noble Baroness for all her work in this field and for introducing that Bill. As far as getting on with it is concerned, there is nobody who wants to get on with it more than I do. The noble Lord, Lord Teverson, has drawn attention to the fact that we have probably 10.7 gigawatts or more of onshore wind capacity that could retire between 2027 and 2042, and those onshore farms will be completely lost if they retire without any repowering. So repowering is clearly essential, not only to keep those wind farms going on the same sites but because of the tremendous power gain that could come about by using modern turbine methods and modern blades to increase the output by perhaps up to two-thirds when those existing sites are repowered.

[Lord Moynihan (Con)]

My Lords, when considering repowering our intermittent wind energy when, to use the Minister’s words, the sun does not shine or the wind does not blow, does the Minister agree that the main energy policy lesson from the current crisis is that, as a nation, we should prioritise our own firm power energy independence? Does he agree that the best way to achieve this is to reduce our LNG imports from the Gulf and the US by accelerating gas development in the North Sea, and for his department to provide the one piece of paper we are all waiting on—the approval of the Jackdaw gas field to heat 1.6 million British homes this autumn?

[Lord Whitehead (Lab)]

We have been around this path several times before recently. Suddenly introducing lots more gas into the system will make no difference to the resilience of this country against international prices, whereas developing genuinely homegrown power over a period makes all the difference. I should add that homegrown power is not just variable homegrown renewable power; it can be batteries, biomass and so on, which can be firm power in its own right. It is a question of getting the whole picture together to make sure that variable power and firm power on a renewable basis complement each other, so that you have reliable power that is homegrown and secure in the long term.

Contracts for Difference (Sustainable Industry Rewards and Contract Budget Notice Amendments) Regulations 2026

Lord Whitehead Excerpts

Monday 23rd March 2026 Grand Committee

Moved by

[Lord Whitehead]

That the Grand Committee do consider the Contracts for Difference (Sustainable Industry Rewards and Contract Budget Notice Amendments) Regulations 2026.

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

My Lords, after all that, noble Lords have me all over again for this next one. We had a very interesting and absorbing debate on the last SI, with some very good points made, but I hope that this debate can move to a conclusion with reasonable alacrity. I will make a brief opening statement. These regulations were laid before the other place on 5 February 2026. I remind noble Lords that they still carry the legacy name of the policy, but it is now known as the clean industry bonus.

I will cover three points: first, the purpose and direction of the clean industry bonus in the next rounds of bidding for offshore and onshore wind, AR7, AR8 and AR9; secondly, how the regulations will support the continued evolution of the contracts for difference scheme; and, thirdly, why the clean industry bonus funding for offshore wind will now be conditional on applicants signing up to an offshore wind fair work charter and how we are using the policy to help drive a more strategic approach to skills.

I turn first to the scheme. Contracts for difference remain the Government’s principal mechanism for supporting new low-carbon electricity generation. The CfD has a strong track record in deploying renewables at pace while protecting consumers through competitive allocation. But as the offshore wind sector has matured, it has become increasingly clear that delivering clean power at the lowest cost is not on its own enough. We must also secure the industrial capability and resilient supply chains needed to build and maintain that infrastructure here in the UK.

That is the purpose of the clean industry bonus. It will provide additional CfD revenue support for offshore wind developers that commit to investing in UK supply chains, such as factories and ports, or those that invest in cleaner supply chains overall. Funding is allocated through a competitive process run ahead of the main CfD allocation round, with awards made on the basis of value for money and payments released only when commitments are delivered. The record of this is that, in allocation round 7, £204 million was allocated through the clean industry bonus, crowding in up to £3.4 billion of private investment into offshore wind factories, ports and supply chains across the UK. The scale of investment represents a significant vote of confidence in the UK’s supply chain and a strong return on public funding.

I now turn to the evolution of the scheme. These regulations will make targeted, practical improvements to allocation round 8—the next one coming up—simplifying the process for applicants, clarifying rules on budgets and ensuring that the scheme operates smoothly. In particular, the changes will speed up and streamline elements of the application process, reduce administrative burdens, provide a clearer legislative basis for how budgets can be set and communicated, and clarify the position where delivery is disrupted by events outside an applicant’s reasonable control. In addition, the regulations will update the scheme’s sunset arrangements so that the clean industry bonus may be applied only to a round established before 31 December 2028, unless Parliament wishes to prolong it. It is for AR7, AR8 and AR9. The Government also intend to extend the clean industry bonus to onshore wind from allocation round 9, providing a sensible lead-in period for that smaller industry to prepare.

My third and final point is on fair work and skills. The most significant change for allocation round 8 is that clean industry bonus applicants will need to sign up to the offshore wind fair work charter, a tripartite agreement between unions, business and government that aims to raise the standard of job quality in offshore wind and make jobs in the sector more attractive. The charter builds on forthcoming commitments in the Employment Rights Act 2025, in particular by asking that the offshore wind sector proactively implements voluntary access agreements for trade unions. It also includes a commitment to strive for best-practice health and safety standards that go beyond legal minima.

Our commitment to good jobs through the clean industry bonus does not stop at the fair work charter. We are pressing ahead with a skills investment fund that will help develop the skills needed for the clean energy transition. The idea is that offshore wind developers will pool together skills funding and initiatives rather than relying on individual projects trying to address short-term needs. The Government and the offshore wind industry have agreed that they will work together to set it up by 2027 and that it will be funded by existing developer contributions to the supply chain, not by asking for more money. Once that skills investment fund is up and running in 2027, developers will be asked to contribute to it as a condition of taking part in the CIB.

In conclusion, these regulations build on the foundations laid in allocation round 7. The success of that foundation is in front of us. They strengthen and supply the operation of the scheme and introduce provisions of fair work and skills. I beg to move.

[Earl Russell (LD)]

My Lords, I note at the outset that on these Benches we welcome the direction of travel as set out in this SI. These regulations aim to modernise the contracts for difference scheme and strengthen the clean industry bonus, previously the sustainable industry rewards, ensuring that our transition to net zero is not only greener but fairer and more locally grounded. We note the figures the Minister gave in his speech about just how much funding this SI can help levy into our green industry and our local green economies.

The Liberal Democrats have long championed the principle of clean industry growth that benefits and serves our communities, so we see the extension of the clean industry bonus framework to all CfD allocation rounds before December 2028 as a welcome and sensible move. Likewise, providing greater flexibility in budgets through new minima and maxima can, if well managed, encourage dynamism and adaptability in fast-changing energy markets. But that flexibility must be balanced, and we must make sure that obscurity does not creep in with that.

The move to express CfD budgets in total sums rather than pounds per gigawatt raises a question for us. How will Parliament and the public track whether these funds are allocated efficiently or indeed equitably between technologies and different technologies in different regions? If the Secretary of State can now set sub-budgets for different technologies, will there be transparent reporting mechanisms showing how these powerfully restrictive levers are used and on what evidence they are used?

The Government’s stated aim is to reward clean energy responsibility and community-based industry practices, and we support that wholeheartedly. Yet these regulations also compress the consultation window for future framework revisions from the original 30 days, I think it was, down to just 10. Are officials satisfied that the timescale is adequate, that it will not push out smaller-scale contractors and that they will genuinely be able to compete on a fair and level playing field?

The introduction of fair work standards for developers seeking the clean industry bonus is also welcome. If the green economy is to deliver social renewal alongside decarbonisation, it must be built on fair pay and secure conditions, with workers having a voice in their workplace. Requiring developers to adhere to the fair work charter negotiated with trade unions is overdue but is a very important and welcome reform. Can the Minister give me a sentence or two about how, when these measures come in, the Government plan to monitor and verify that they are being met? What reporting and monitoring mechanisms will exist, and how can the public have confidence in that?

Turning to the force majeure provision, I recognise why the Government have that clause in the contract, but it raises a question. Who makes judgments on that, and what are the objective criteria for making those judgments? Obviously, the Government want clear safeguards, as do we. We want to make sure this clause does not become a loophole through which binding supply chain commitments can quietly evaporate because of unforeseen circumstances.

The extension of the scheme’s life plan to the end of 2028 feels pragmatic, but it is also modest given that 2028 is not that far away. What are the Government doing to look beyond that 2028 framework, which is only three years away? Also, are they considering putting the clean industry bonus on a statutory footing and extending that timeline?

We welcome these commitments. Although we have a couple of questions, we very much welcome the direction of travel set out in this SI.

[Lord Moynihan (Con)]

My Lords, I declare my interest as the chairman of Acteon, a global specialist subsea services company that operates worldwide in offshore wind and oil and gas.

It is good that the Government are investing in UK supply chains. However, whether it is cables, batteries, inverters or critical minerals, the Government’s rush to meet their unrealistic clean power targets will make the UK more dependent on imports, particularly Chinese ones. With all the energy security risks that brings us, the world becomes more dangerous; I will concentrate on that in a moment.

The clean industry bonus provides additional CfD financial reward for offshore wind developers, provided they prioritise investment in regions that are most in demand or in cleaner supply chains—for example, traditional oil and gas. I assume that this also includes ex-industrial areas, ports and coastal towns. Ana Musat, the executive director of policy at RenewableUK, stated:

“The Clean Industry Bonus is a good starting point as part of a wider industrial strategy which the Government is due to unveil in full this summer, and which we hope will be complemented by new policies to support the expansion of UK ports. With larger ports, we could secure even more investment in offshore wind manufacturing and turbine assembly”.


We have already debated ports, particularly in the context of Northern Ireland, over three and a half hours in the Chamber. The reality is that most developments in ports are not going to take place for many years: in Belfast, electrification—the ability to charge—will not happen until 2035, and there is little sign of investment in ports across the United Kingdom. Can the Minister give the Committee greater clarity on exactly what he sees on the time of the rollout to support ports, modernisation and the level of investment?

On my reading, although it is good that the Government are investing in UK supply chains, the current timeline is too onerous on UK supplies; it is that timeline on which we really need to concentrate in the Minister’s response. Take NESO, which has observed that Clean Power 2030 will require more than £60 billion of private investment. It says that

“meeting the target would require the deployment of more supply-side technologies, such as onshore and offshore wind, solar energy and battery storage, on average each year to 2030 than there ever has been in a single year before”,

with

“nearly 1,000 km of onshore”

electricity network infrastructure

“and over 4,500 km of offshore network”.

It goes on to say:

“That is more than double over five years what has been built in total in the last ten”.


This is an issue: the question of timing and the headlong rush towards the target of 2030 are of major concern to my colleagues.

Two other aspects that cause concern have been raised; I hope the Minister will respond to them. The first is the supply chain and the offshore wind fair work charter, which has slipped in via the back door somewhat. In another place, the Minister stated that

“clean industry bonus applicants will need to sign up to the offshore wind fair work charter … The charter builds on forthcoming commitments in the Employment Rights Act 2025, in particular by asking that the offshore wind sector proactively implement voluntary access agreements for trade unions”.—[Official Report, Commons, Fourth Delegated Legislation Committee, 17/3/26; col. 4.]

We cannot see the final fair work charter that is intended. The draft charter and the draft code of practice for trade union access are still subject to government consultation so, as I understand it, are not final yet. I have certainly not seen the final drafts. It seems the wrong process to have this very important commitment at the centre of the SI without the opportunity for parliamentarians to review what is intended in detail.

We know that the draft code leans towards giving unions practical workplace facilities. It says that, “where practicable”, the employer should “provide a notice board” in a “prominent location”, allowing union material to be displayed without employer veto. Even if the employer or the employees do not want it, that is what is required. When needed, the employer should allow a union official on to the site to display it. It also points to meetings, surgeries and the use of workplace facilities. It even suggests joint meetings and joint notice boards as ways to deliver information.

It limits the employer’s ability to manage around union meetings. The employer should

“avoid the scheduling of other conflicting … events which would draw workers away from the union’s meeting. Unless reasonable in the circumstances, the employer should not offer inducements to workers not to attend”.

The example given is that employers should not tell workers that they can go home early instead of attending the union meeting.

The employer is expected to respond incredibly fast during that negotiation. If it rejects the union proposals, the code says that

“it should offer alternative arrangements … at the earliest opportunity, preferably within three working days of receiving the union’s initial proposals”.

This is probably the closest thing in the draft to the burden of very short notice that people are talking about. Many other aspects of this code are really concerning.

The central point I am making to the Minister is that it is vital to have sight of the final code and for us to be able to debate it. If that code is too onerous on the supply chain, we risk losing good-quality companies in the United Kingdom that could add value to the supply chain and to what the Government are seeking to achieve. We live in a highly competitive global market and, unless there is a reasonable approach towards what employers should and can do, we risk losing investment.

I emphasise to the Minister that the draft code of practice for trade union access is insufficient and, because it is still subject to government consultation, is not in final form yet. It really should have been presented to the House before these regulations were agreed.

My second point is about the security of our energy supplies and suppliers. Recent reports suggest that the Treasury may allow Ming Yang Smart Energy to supply turbines for the Green Volt North Sea wind farm. As I understand it—I look forward to the Minister’s confirmation—Ming Yang is planning £1.5 billion of investment to build the largest offshore wind turbine manufacturing facility, at Ardersier near Inverness. That this is a Chinese firm has led to considerable questioning from UK government officials who, I understand, are currently evaluating the proposal amid warnings from experts of potential security vulnerabilities—such as Chinese-manufactured sensors and potential kill switches in critical energy infrastructure. This comes on top of a series of initiatives that the Government have taken to engage with the Chinese, not least in our civil nuclear programme.

It concerns me that in wind and solar we now have the potential for our supply chain to be significantly impacted by Chinese manufacturers. We know that close to 90% of our solar panels come from China; all include polycrystalline. Of these imports, 45% are understood to come from the Xinjiang Uyghur Autonomous Region, where slave labour is known to have been used in the manufacture of solar panels. Despite the requirements introduced by the Secretary of State in the Great British Energy Act to take full responsibility for the ethical sourcing of solar panels, the Minister’s department has consistently been unable to assure parents, teachers and children alike that their newly installed solar panels have not been made by slave labour.

As I say, the secrecy surrounding the UK-China MoU aroused yet further suspicion on this, since co-operation with China has now been extended to the supply chains to include civil nuclear; charging infrastructure; battery storage; offshore wind; carbon capture, usage and storage; and renewable hydrogen. They are all identified in that MoU. Where are the resilience and security in our own energy sector to be found if we are opening wide the door to the Chinese, who are now setting up a wind turbine business in Ardersier?

I hope the Minister can respond to both those points. The fair work charter is a significant concern, as is the growing prominence of Chinese suppliers to meet the clean energy objectives that the Minister and the Government have set out.

[Lord Whitehead (Lab)]

I thank noble Lords for their important contributions to this debate. I did not hear any particular dissent from the idea that this is a good thing that will help British supply chains in offshore wind and, we hope, onshore wind, to develop significantly in the future. That will be done through a process whereby, in future rounds, those bidding for services will put in, as a pre-bid to the AR7, AR8 or AR9 bid itself, a notice of intent about what they will do as far as British supply chains are concerned and how they will source from them. When they get the additional CfD arrangement for doing that, the money will be released only when those commitments have been met. It is not a “money for pie in the sky” arrangement; it is very much a “money for pie firmly affixed to the ground” arrangement for the future.

Of course, one can never be sure exactly what commitments will be made by people putting forward their proposals to get into a particular realm but, certainly in AR7, they have covered all sorts of aspects of the supply chain, including port infrastructure, et cetera. The noble Earl raised the question of port development. A lot of investment is going into ports in general at the moment, and into the ability of ports to provide the sites for fabrication, et cetera, for offshore wind, as well as making sure that the ports are as well equipped as possible for Sea Jack-type erection vessels and so on. The idea is to thoroughly uprate investment in ports to support the offshore wind energy industry of the future.

The noble Lord, Lord Moynihan, was concerned about the fair work charter. I just looked it up: it appears on the government website and seems, pretty substantially, to be a final document. I am sorry not to have got my speech finished before the Division.

--- Later in debate ---

[Lord Whitehead (Lab)]

My Lords, votes in this House are tremendously helpful for securing clarity where maybe there was not clarity before in certain aspects. They are particularly helpful half way through a speech, enabling that speech to end on a clearer note than might otherwise have been the case.

I mentioned the offshore wind fair work charter to noble Lords just before we departed to vote this afternoon. It is true that the final offshore wind Fair Work Charter is now complete and live on GOV.UK, which I showed to noble Lords on my phone. However, it is also true to say that the Department for Business and Trade is pursuing a consultation on make work pay, which has many elements of the offshore wind fair work charter in it. That is what is not complete and is being consulted on at the moment. As far as the offshore wind industry is concerned, the charter that I have mentioned is complete and was, as far as I understand, extant before this SI.

[Lord Moynihan (Con)]

I am grateful to the Minister. Let me put to him my understanding of where we are at the moment, because this is a really important point. I majored on this so I have looked into it. We have the Fair Work Agency, of course, and we have the overview of what the offshore wind fair work charter will look like. A cornerstone of that charter for the offshore wind sector is the issue of trade union access. That was what I was concentrating on; I gave some examples on the record of the issues that trade union access would raise with companies. It is still a draft code of practice for trade union access. It is not finalised. It is still subject to consultation and, I assume, to an SI that will be brought before Parliament.

My position was therefore that while we were debating the importance of an offshore wind fair work charter, we were unable to be specific about what it would include, particularly on the cornerstone point of access for trade unions to companies in this sector. That is the important point. It has yet to be finalised, and I understand that there will be an SI in due course. My point was that it would have been better for us to look at that in the context of a complete offshore wind fair work charter, so that employers could understand the issues about trade union access, and a final code of practice for that access.

[Lord Whitehead (Lab)]

I thank the noble Lord for that clarifying intervention. Essentially—forgive me for putting it quite like this—both of us are more or less right: the charter is there and has been there for a little while. But obviously, once a charter is up on the noticeboard, as it were, there are details of its implementation still before us. One of them is that question of the detail—not the principle—of trade union involvement in the offshore wind industry as a whole, and the requirement that from AR8, the companies involved in bidding sign up to that fair work charter overall.

One important thing to say is that the whole process of the fair work charter has been tripartite throughout, with government, industry and unions all involved in setting up the charter itself and its consequences. It is not that anyone is going to impose anything on anybody; it will be a question of continuing tripartite involvement and interest in the detail of the fair work charter, as well as the charter itself. While I take the noble Lord’s point that in an absolutely ideal world it would have been a good idea if the sub-details of the fair work charter itself had all been worked through, in the real world it is very seldom possible to do that when something comes into place. I think he will appreciate that trying to get this in place so that it runs for AR8 and onwards, for example, is an important process of pace. Therefore, having the principle in place, with everyone clear what they are supposed to sign up to for AR8, is an important move in its own right.

[Lord Moynihan (Con)]

Indeed, the Minister is right as well. The key point, however, is one of emphasis. To me and to my colleagues, and to companies that may access government funding through this scheme, not to know the detail of what is proposed through the draft code of practice for trade union access negates, to a great extent, the initial tripartite agreement, because that agreement can hold only when all three parties to it know the details.

I am not disagreeing with the Minister’s overview about the Fair Work Agency being in place and the fair work charter being drafted. But I am genuinely concerned that if government money is to be made available to companies in this sector—and we are really looking to encourage UK companies and international companies to come and play an important role in the supply chain—we need to have those details before we trumpet an offshore wind fair work charter without actually seeing them. I do not think that is an unreasonable point to make.

[Lord Whitehead (Lab)]

I thank the noble Lord for that point, which confirms that we are both substantially rightish. In some subtexts of the overall charter, there are still some things to be sorted out, but not the charter itself. It should be pretty clear to companies what they are signing up for and what they will be required to undertake once they have signed up for it. The question of how that then works out in detail over the period is a live issue, but it is not an issue that overthrows the charter and its clarity. I am not sure we can take that any further today, but I am happy to engage with the noble Lord offline if he needs clarification on any further points.

The noble Lord also mentioned something we have discussed on several occasions: work practices in the supply of some components for low-carbon industry. He mentioned solar panels, obviously, but that issue potentially applies to other things as well. I can only repeat the points about the Government’s efforts to ensure that slave labour is not used in components that are coming to the UK, but I add a further qualification in that the money for which companies bid as they go into allocation rounds allows, among other things, for those companies to use not necessarily the cheapest tender but the tender that is most suitable for the development of both the UK supply chain and good, ethical working practices in the industry, which are part of the fair work charter. So one would expect those companies to be actively engaged in ensuring that what they are committing themselves to, as far as UK supply chains are concerned, includes the sorts of consideration that the noble Lord mentioned. Indeed, supply chains that one can absolutely say are not engaged in slave labour, because they are based in the UK, will be a substantial underpinning of this whole process.

We have exhausted pretty much all the available avenues on this SI, but I will briefly address the questions asked by the noble Earl, Lord Russell. He was very supportive of this measure but was particularly concerned about whether it should be a permanent part of the process. He questioned why there is a sunset clause in the Bill for 2028. Of course, that sunset clause encompasses three allocation rounds, and I hope an awful lot of investment will have been secured in those three rounds, but the Government wanted to make sure that, for the long term, that remains the right thing to do. There may well be, in future allocation rounds—if they have been a great success in the earlier rounds—better uses for those particular commitments than are in this SI today.

It is important that we learn from what happened in AR7. We will see what happens in AR8. That, hopefully, will culminate in AR9, at which point we can review and decide the long-term future of this mechanism and, indeed, whether it can be used for different and wider purposes in the future, as mentioned by some noble Lords today.

The overall welcome by noble Lords for this measure is certainly very welcome. On that basis, I hope the SI will secure unanimous support.

Motion agreed.