Drax Biomass Power Station

Baroness Blake of Leeds Excerpts

Monday 3rd July 2023 Lords Chamber

[Lord Callanan (Con)]

The noble Lord was probably in the other place when the regulations and laws for Ofgem were passed. It is an independent regulator; that is the whole principle of it. Until I see any evidence that it is not carrying out its job satisfactorily, I will continue to have confidence in it.

[Baroness Blake of Leeds (Lab)]

My Lords, when Ofgem opened its investigation into Drax’s biomass sustainability reporting a month ago, it made clear it would act if it found breaches of the rules—the right approach, surely, to a single case. However, what assessment have the Government made of wider compliance with reporting requirements and what steps are they taking to improve monitoring, particularly with regard to the origin of fuel sources?

[Lord Callanan (Con)]

I refer the noble Baroness to the answers I have given to previous questions. There are other biomass operations that fulfil the sustainability criteria. If any evidence is produced and if the noble Baroness has any evidence, I would be delighted to pass it on, but until then we should trust what they say.

SMEs: Net-zero Targets

Baroness Blake of Leeds Excerpts

Wednesday 7th June 2023 Lords Chamber

Asked by

[Baroness Blake of Leeds]

To ask His Majesty’s Government what steps they are taking to support small and medium-sized enterprises in working towards net-zero targets.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, the Government have launched a campaign aimed at increasing the energy efficiency of businesses, charities and public sector bodies. We continue to support UK businesses to meet their net-zero commitments via the UK business climate hub. SMEs are encouraged to join the UN’s Race to Zero initiative; more than 4,200 UK small businesses have done so. We are also developing a dedicated energy advice service for SMEs, which is due by the end of the year.

[Baroness Blake of Leeds (Lab)]

I am sure that we all value the important contribution that SMEs make to our economy. One of the issues consistently facing them is their ability to employ and retain skilled workers in a highly competitive jobs market. This is especially prevalent where skills are lacking, such as in retrofitting buildings and in new green technologies. The scale of the challenge of achieving net-zero targets presents SMEs working in these areas with a great opportunity. However, barriers such as shortages of skills and available finance are preventing them making the progress that they seek to achieve. What steps are the Government taking to promote green jobs, skills training and competitive supply chains, particularly by working with industry, the education sector and the finance sector to create pathways into these jobs?

[Lord Callanan (Con)]

The noble Baroness makes an important point. The encouragement of green jobs and helping workers to go from the old fossil fuel economy to new jobs is a challenge. We are spending several billion pounds a year working with the DfE and across the various green homes grants. We have a number of highly skilled green jobs funds, which industry accessed. There is no one simple answer but she is right; it is a job that we are working on.

Energy Bills Discount Scheme Regulations 2023

Baroness Blake of Leeds Excerpts

Monday 22nd May 2023 Grand Committee

[Lord Teverson (LD)]

My Lords, that is quite a long introduction, and I thank the Minister for it. I have to admit to him that I was looking around at the pictures, and thinking that it was interesting that Moses managed to base Judaeo-Christian law on 10 paragraphs, whereas here we have about 100 pages on energy. We will perhaps move on to that.

I wanted, while not trying to be disingenuous, to actually congratulate the Government on something in these particular instruments. In the instrument on heat suppliers, no. 455, on page 12, in paragraph 1E(6)(c), we actually have the court being able to apply a fine of up to £5,000 in terms of enforcement, which is how I read it. I thought, “bingo”: there is actually a way in which, when we go through all these pass-through regulations, we could actually have something which might appear like a civil on-the-spot fine, which is a way to deter or provide some jeopardy if these pass-through arrangements are not adhered to. But needless to say, in instrument no. 463, we are back to the 2% on the outstanding amount. I am not asking the Minister to go through that again, but I genuinely believe that there was a sensible solution in terms of enforcement and that sort of approach, which could have been used in the other SIs.

On the energy and trade-intensive industries, one of the sectors that is not there is agriculture. I know that the Minister has a very good relationship with Defra, but I wondered whether he could perhaps take back again the fact that the horticulture sector—poultry, I understand, as well—is equally energy intensive, yet that primary industry sector has been left out. I realise, clearly, that this SI cannot be amended to do that, but I show my regret in this context that the agricultural industry has been left out of that. Perhaps the Minister would like to offer an explanation of why.

There is a cap here, which I am not necessarily against, of £5.5 billion. Is it on a first come, first served basis, or are the Government completely assured that that limit will not be hit?

Lastly, my only other question is whether the Northern Ireland situation has been sorted out with the European Union, in terms of approval, which I understand is in process.

[Baroness Blake of Leeds (Lab)]

I also add my thanks to the Minister for his fulsome explanation of the regulations before us today. I think we are on record as saying that we were disappointed with the delay at the beginning, but I think we can now say that it seems as though the mechanisms are up and running, and delivering for the people who desperately need this support provided.

I do not want to go over all of the points that have been covered and raised, but I have a couple of questions, particularly with reference to the Energy Bills Discount Scheme (Non-Standard Cases) Regulations. The noble Lord, Lord Teverson, raised the agricultural sector; that is one to consider. Could the Minister anticipate whether there will be other areas coming forward that are struggling and are not covered under this provision? As we know, this area is regarded as a relatively small part of the market. “Relatively” is a very broad definition, and I would like to know whether the Government actually know the precise size of this area as we go forward.

One area that we have raised on several occasions is the whole area of implications for vulnerable customers and the provision that is laid out for intermediaries to cover. We recognise that the Government are developing a guidance and communication strategy to ensure those intermediaries are aware of their obligations, and therefore pass on the support as required.

Climate Change Committee: Discussions

Baroness Blake of Leeds Excerpts

Thursday 27th April 2023 Lords Chamber

[Lord Callanan (Con)]

I actually agree with him on that particular statement. Of course we need to move towards phasing out fossil fuel use; nobody disagrees with that. We have a legal commitment to do that and we are doing so through a transition. As I said in response to previous questions, the question is where we get those reserves from in future. Even with new licensing, UK production in the North Sea will continue to decline at a rate of about 7% per year. At the moment we are importing LNG to satisfy our domestic demand, which has about twice the carbon footprint of that produced in the North Sea. I really do not understand the point the noble Baroness is making.

[Baroness Blake of Leeds (Lab)]

My Lords, as we have heard, the CCC’s report last month emphasised the need for decarbonising and expanding the electricity system to rapidly reduce the UK’s demand for fossil fuels. As mentioned in the report, the Government still have not provided a coherent strategy or essential details on how they will achieve their goal of decarbonisation by 2035. When will these be provided? When will the Government accept that the quickest and cheapest way to offer the required supply of variable renewables to do so will involve onshore wind and solar?

[Lord Callanan (Con)]

Decarbonising our electricity system, which we are doing at the fastest rate of all G7 countries, will require much more electrification. Renewable generation capacity is currently six times greater than in 2010. We are expanding to deliver up to 50 gigawatts of offshore wind capacity by 2030. We have said that we will also consider onshore wind in future CfD rounds. We have one of the highest solar capacities in Europe as well—in fact, we have more solar capacity than even countries such as France.

Energy Bill [HL]

Baroness Blake of Leeds Excerpts

Report stage
Monday 17th April 2023 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, I will speak briefly to Amendment 68 in the name of the noble Lord, Lord Whitty, to which I have attached my name. I will also make a couple of other comments on this group.

I can probably predict some of what the Minister will say about the amendment from the noble Lord, Lord Whitty. I note, as I am sure all Members of the House have, that, three days ago, the Government announced £30 million for experimental or first-stage renewable storage projects. We have pump thermal, thermal and compressed air, and a number of other schemes. What is really important about this amendment is the context of the report to Parliament in six months. This is something that is absolutely crucial to the renewables transition, and we really need to see democratic oversight of where it is going.

I particularly make the point that this must be a strategy. Instead of one-off projects here and there, we need a whole integrated system. One thing that is really unconsidered is vehicle-to-grid storage. As we have more and more electric cars, if we have innovation in management we can use those cars as storage when people do not need them for transport. This is a way in which we would need much less resources—the Government are themselves saying that we could save £10 billion by 2050 by reducing our need to generate electricity.

I have just a couple of comments to make on the other amendments in the group. It will not surprise anyone in your Lordships’ House to hear that I oppose Amendment 137 in the name of the noble Lord, Lord Ravensdale. However, its very existence is a demonstration of the way in which new nuclear can be a distraction from the renewables investment that is our energy future.

On the amendments in the name of the noble Lord, Lord Teverson, on electrifying and decarbonising oil and gas facilities, I am afraid that the term “greenwash” has to appear at this point. I have an amendment in a later group asking for no new oil, gas or coal. Any reduction in energy use on a new oil rig because it has some solar panels on top of it does not take us anywhere like where we need to go in this climate emergency.

[Baroness Blake of Leeds (Lab)]

My Lords, I will speak briefly to the amendments in this second group, starting with Amendment 65 from the noble Lord, Lord Teverson. All I can do is echo his clear requests for confirmation that the Government will be more flexible and for clarity around multipurpose interconnectors, particularly with regard to the relationships between Great Britain and other jurisdictions. Will the interconnectors operate in a similar way to the offshore electricity transmission regime? I hope that the Minister will be able to give the reassurance and clarification that the amendments in the name of the noble Lord, Lord Teverson, ask for.

I thank my noble friend Lord Whitty for tabling Amendment 68, on an issue that he feels passionately about and comments on whenever the opportunity arises. We know that, as the electricity network develops new facilities and new renewable sources of generation, there will be a need for more storage capacity. As we have said, there is a non-exhaustive list of technologies, and new ones coming on stream that we might not have considered so far, and so comments must extend beyond batteries. The important part of this amendment to consider is a commitment from the Government to give support to assist with developing the storage capacity that we need.

The further amendments, led by the noble Lord, Lord Teverson, look to remove legislative barriers to the electrification and decarbonisation of oil and gas facilities, and to work towards a green financing framework. We must be mindful of the uncertainty of costs, going forward. When considering these amendments, it is important to consider decarbonisation, which is critical to the Bill, but also affordability and ensuring that energy is within the reach of every person in the country.

We know that the zero-carbon electricity system is possibly 19% cheaper than gas-based facilities, and that UK gas power is currently estimated to be nine times the amount of renewable power. Driving down energy costs means that we need cheap, clean power. We must take this rare opportunity presented by the Bill to ensure that we use the legislative framework to drive measures that will, in the short-term, reach towards action to decarbonise the electricity system and bring down costs.

The passage of the Bill through the House has been quite lengthy, but we really must take the opportunity presented to us to ensure that we make the progress that is required.

[Lord Callanan (Con)]

My Lords, I thank all Members who have contributed to the debate.

I completely agree with the last point made by the noble Baroness, Lady Blake. It is very important that we use the powers to do exactly what she suggested: to drive the decarbonisation agenda. Despite some of the criticisms, we are making excellent progress in this country—much better than most other G7 countries. However, we must be very conscious of the cost to consumers.

Amendments 125 to 129 were tabled by the noble Lord, Lord Teverson. I was amused to see that he has incurred the wrath of the noble Baroness, Lady Bennett, in trying to come up with pragmatic, sensible solutions for the energy system of this country. All I can say is, “Welcome to the club”.

I will start with his comments on the North Sea Transition Authority. We are engaging with industry to ensure the delivery of the North Sea transition deal emissions reduction targets and the successful rollout of electrification, which we all want to see. We are also considering how to utilise the Secretary of State’s existing powers, if needed, to support electrification. We are confident that, in this area, additional primary legislation is not required. As the noble Lord mentioned, the North Sea transition deal commits the offshore oil and gas sector to reducing emissions from operations to 50% of 2018 levels by 2030. As I have said repeatedly in this House, during the transition there will be an ongoing need for existing oil and gas resources, but it makes sense to extract them with the minimum possible carbon emissions.

--- Later in debate ---

[Lord Teverson (LD)]

My Lords, from these Benches I welcome particularly the amendments in the name of the noble Baroness, Lady Boycott. I will not detain the House except to say that it is quite clear that community schemes have not operated effectively for many years. I should declare that I am an insignificant shareholder in a local community scheme in my own home area, which was set up under the feed-in tariffs. The schemes as put forward are not a kind of feed-in tariff regime: they are really looking for stability of price and are not around subsidy. I just say to the Minister that the Government’s overall target is decarbonisation of the grid by 2035: let communities play a big part in that, because one thing that is really important here is that community schemes allow for communities, individuals, households, families and small businesses to participate in the decarbonisation of our economy and net zero. They can be a part of it and that is why these amendments are so important.

On the amendment in the name of the noble Lord, Lord Ravensdale, it is indeed very important that local authorities are involved and are movers in this area. All I can say is that I have to learn from him: he has the ear of the Government and the Minister far more than I do, and perhaps I could have some lessons afterwards about how to be successful in getting amendments into Bills.

[Baroness Blake of Leeds (Lab)]

My Lords, I declare my interest as a vice-president of the Local Government Association. It will come as no surprise to Members of the House that I support all these amendments, particularly Amendment 94 in the name of the noble Lord, Lord Ravensdale. Going by my personal experience, not giving a broader role to local authorities is such a missed opportunity and I cannot understand why these amendments would not be supported, particularly since it is, in all honesty, such a mild request: better definition of local authorities’ role; and asking for guidance, which is a perpetual demand from local authorities, I have to say, in trying to move things forward. As we know, other key reports and reviews have recognised just how important it is to get local buy-in and to get local stakeholders involved.

I turn to the amendments in the name of the noble Baroness, Lady Boycott, and signed by others. It is essential that we bring these elements together. What we are talking about, without repeating the technical issues that have been raised so powerfully today, is that we need to aim to have a framework that will support the growth of community and smaller-scale energy schemes and also provide regular reporting so that everyone knows how things are progressing. I have to say that all we are asking for is the following of an evidence-based approach. We can look at the success of other, related schemes in these areas that have been successfully led by local authorities. These include the rollout of electric vehicles, with local authorities leading by example in changing their fleets to electricity. District heating is another example where, when you have very strong local buy-in, the success moves forward. What we are asking for here is the ability to inform, shape and enable key aspects to deliver energy decarbonisation.

I believe very firmly in involving local stakeholders from the beginning; they are far more likely to come on board with schemes that might have aspects that they find work against their interests if they understand and are included in the bigger picture. Many people will make compromises when they understand the greater good, and the opportunity has been highlighted over the past year by the dramatic increase in energy prices and the risk of energy scarcity. I think the landscape has changed in this regard. Let us give confidence to local people and communities by developing the framework for the growth of communities and smaller-scale energy schemes. It is regrettable that more progress has not been made so far. The role of Ofgem in this, giving clear methodology and quality standards, is essential and will give the credibility that is needed, as the noble Baroness, Lady Boycott, so eloquently pointed out.

Through the involvement of local communities, we are asking for a more effective and better targeted delivery of national priorities; and we all know that we need more determination to deliver on the ground. I hope we will see some movement in this area and can only echo other comments: if we fail to make progress, this is such wasted potential, and I hope we will hear some positive comments with regard to these amendments.

[Lord Callanan (Con)]

I thank all Members who have contributed, particularly the noble Baronesses, Lady Boycott and Lady Bennett, for Amendments 134 and 135—the noble Lord, Lord Lucas, proposed them but sadly is not in his place. I am grateful to noble Lords who met me and officials recently to discuss this matter and give us a chance to talk through the departmental thinking.

As I said when we met, the Government recognise the role that community and local renewable energy schemes can play in supporting our net-zero targets. But we continue to believe that small-scale, low-carbon electricity generation should be brought forward through competitive, market-based solutions. A key feature of the smart export guarantee regime is to allow suppliers to set both the tariff level and the structure and for suppliers themselves to determine the value of the exported electricity alongside all the associated administrative costs. Any move to introduce a regulated price for exported electricity has the potential to limit the overall scope for innovation and export tariff packages. This would fundamentally undermine the principles of the supported export guarantee policy objective, which looks to encourage a market-driven approach.

Furthermore, the amendments as drafted are unlikely to result in better outcomes for consumers compared with other tariffs that would be available from suppliers. First, there would be initial set-up and ongoing delivery costs associated with the scheme for both Ofgem and the suppliers, which we expect would be material. These costs would be recovered via the service fee charged by suppliers and therefore probably reflected in the local tariff price.

Secondly, small-scale, low-carbon generation will, by its nature, be intermittent and unable to supply local consumers at all times. Suppliers would therefore need to buy additional wholesale energy from other sources—for example, during periods of peak demand—and incur all the associated network and system costs. The local tariff would also be required to have regard to the export price paid to the local generator. This would create a somewhat perverse outcome where higher export prices would benefit the generator but also increase the tariff price.

As a result, there is no guarantee that the local tariff would be lower than the current regulated standard variable tariff. In fact, there is some reason to believe that it would actually be higher.

--- Later in debate ---

Just as I began by complimenting the Government on their leadership, the standards they set and the targets they have put forward, I have to say that if they want to uphold that, they cannot allow any new coal mines, and they must find a way to stop mining which will increase the emissions from the most damaging means of generation. We do not have time to wait while this all works its way through. This is an emergency. When you deal with an emergency, you do not light an ancillary fire. You do not do something which manifestly runs wholly against everything else you have said, and against everything the Minister has said in defending the Government’s policy throughout the passage of the Energy Bill.

[Baroness Blake of Leeds (Lab)]

My Lords, I thank all noble Lords for their very important contributions on the amendments in this group. It is an enormous privilege to follow the noble Lord, Lord Deben, with his experience and expertise in the subject matter before us today. I want to keep my comments brief as we have had a lot of opportunity in different discussions and debates, particularly during the passage of this Bill, to try to get across just how strong the feelings are around the House on these matters.

I pay tribute to the noble Baroness, Lady Sheehan, for her amendment on the burning of methane and other hydrocarbons produced during oil extraction. As we have heard, very distinguished bodies have come out against this. In particular, there is a real concern that not taking notice of the need to address this issue undermines the UK’s commitments made at COP 26 and COP 27 under the global methane pledge. We need to take this seriously. We have heard how important the contribution of methane is towards the UK’s net greenhouse gas emissions. Just to add to the statistics around this, during the last decade the UK has wasted £2.6 billion in lost gas sales due to flaring and venting, and released 45 million tonnes of carbon dioxide into the atmosphere. When you put that into the context—as the noble Baroness, Lady Sheehan, did—of what could have been done with that fuel, it is a lesson that needs to be learned.

I concentrate my comments this afternoon on Amendment 131 in the name of the noble Lord, Lord Teverson, and supported by the noble Baronesses, Lady Sheehan and Lady Boycott, and my noble friend Lord Lennie. As we have heard, this amendment is specifically to prevent the opening of new coal mines in England and is a response to the proposed opening of a new coal mine in Cumbria. I have said before that I am really concerned about the message this coal mine sends out. It undermines totally our claim to be an international leader on climate. One only had to look at the press reports from around the world after the announcement was made to understand just how damaging this is.

I fully support the comments from the noble Lord, Lord Deben, on the planning system. I hope that we can move forward on this, so that local authorities and anyone who has a role in making decisions through the planning system have the necessary tools to stand up and not be concerned about the extortionate costs that would come their way if, after having turned down an application, it was turned over on appeal.

The other area that we have not emphasised enough is this: we cannot even claim that the coal mine in Cumbria would provide secure, long-term jobs. That just is not part of the equation here. As we have heard, it will not benefit British Steel. We are already seeing a significant decline in the coal used by the UK steel industry, including a 19% drop in demand for coking coal to run UK blast furnaces. As the noble Lord, Lord Teverson, said, the future is not coking coal.

I am not sure if anyone has mentioned the rather fanciful claim that this mine would be the first carbon-neutral operation of its kind. How can we stand here and say this seriously and honestly, and with particular regard to the fact that, as we have heard, a high percentage of the coal would be exported and so we would have no control over its use.

I am very disappointed that part of the debate around opposing the mine has ignored the far greater opportunities of investing in new green technologies for the local area. It is a perfect area for so many of the possibilities that are coming our way with real, sustainable jobs.

I repeat that Alok Sharma, a former president of COP, said last December that opening

“a new coalmine would send completely the wrong message and be an own goal”.

Surely we should be doubling onshore wind capacity, tripling solar capacity and quadrupling offshore wind capacity. I hope I have made it clear that on our Benches we support the amendment in the name of the noble Lord, Lord Teverson.

[Lord Callanan (Con)]

I thank all noble Lords for their amendments and contributions.

I will just make an observation first, having listened with great interest to the noble Baroness, Lady Blake. I was actually hoping that the noble Lord, Lord Lennie, would reply to this debate, as a fellow politician from the north-east of England. He will know very well that, in virtually every election that I fought in the region, the Labour Party campaigned against the closing of coal mines. I will be gracious and accept that time moves on, but it was only fairly recently that some of their parliamentary colleagues in the other place were campaigning for the opening of new coal mines and against the closing of old ones. Time moves on in politics but, had you said to me 10 or 15 years ago that I would be standing up in the House of Lords opposite a Labour Party telling me it does not want to see the opening of any coal mines, I would not have believed you.

Energy Bill [HL]

Baroness Blake of Leeds Excerpts

Report stage
Tuesday 28th March 2023 Lords Chamber

[Lord Foster of Bath (LD)]

My Lords, in Committee, I tabled an amendment that proposed to extend the zero VAT that is offered for some green energy items to the batteries used to improve the efficiency of solar panel arrays. Unfortunately, the Minister was non-committal, but, having written to the Chancellor, I found that he was rather more enthusiastic, and I was delighted to see in the recent Budget that that measure will now go ahead, so I have not had to bring that amendment before your Lordships’ House again.

However, because of my involvement with solar panel arrays and batteries, quite a number of people got in touch with me to draw attention to their concern about some safety issues with solar panels and lithium-ion batteries, not least in relation to fire. For example, Zurich Insurance recently did some research that showed that, during the last year, fire crews across England were called out 10 times a month, on average, to deal with solar panel-related fires. It gave an example of a claim that it had to deal with in 2020 for a solar panel fire in a block of flats in Kent which left 30 people temporarily homeless and caused £1.5 million-worth of damage.

But there is a much bigger problem with lithium-ion batteries, which you find in many household products, of course—our mobile phones, for example, and even those singing birthday cards that we sometimes get. Perhaps most significantly, more and more of them are in the increasingly large number of e-scooters and e-bikes. As there is a growing number of those batteries, there are growing fire problems, because lithium batteries provide high energy densities, which mean that they can create severe fires with very high temperatures and exothermic reactions, creating significant challenges for our firefighters. Research, again from Zurich Insurance, found that there has been a 149% increase in the number of e-bike and e-scooter fires since 2021. Research shows that fires resulting from other devices powered by lithium batteries has increased by 63% in that time.

Zurich Insurance has sent me details of several incidents involving lithium batteries, including an £84,000 claim for a scooter that went up in flames in a garage and a £13,000 claim for an e-bike that exploded in a customer’s bedroom. AXA, the insurance company, has given me evidence that shows that, in just the two months of June and July last year, it was involved in claims of around half a million pounds.

The London Fire Brigade and other fire brigades have expressed concern. In June 2021, 60 London firefighters were needed to tackle a blaze on the 12th floor of a tower block in Shepherd’s Bush caused by a faulty e-bike battery. In July of that year, five people in Walthamstow were hospitalised by a fire started by an e-bike.

The other fascinating thing is that, until recently, the number of fires in waste disposal sites had been going down. Sadly, that trend has now been reversed, and the evidence shows that somewhere in the region of 48% of all landfill site fires are now caused by lithium batteries. The cost to the waste disposal people and the fire brigades is something in the region of £158 million a year to deal with just that.

Clearly, there are very significant problems which need to be addressed, but we do not want to stop using these technologies; indeed, we want to move rapidly forward, exploring ways to capitalise on how best we can make use of them as sources of new clean energy. However, as we increasingly use these green energy sources, we have to acknowledge that new and emerging risks are coming down the track.

I accept that there are many rules and regulations that already govern the sale and use of these products, but the warning signs are there that the regulations we currently have—those designed to keep us safe—are not keeping pace with the real-world application of these new technologies.

Interestingly, the National Fire Chiefs Council recently said, very significantly, that

“the problem has ‘blind sided’ conventional systems processes and solutions”.

In other words, we need to look for a new way forward—and that is all that the amendment I am proposing does. It asks the Government to look into the issue and to bring forward a report as soon as possible. Nothing could be simpler than that, but it is what a lot of people would like to see happen. I beg to move.

[Baroness Blake of Leeds (Lab)]

I thank the noble Lord for bringing this information to our attention. Some interesting reports documenting the risks are available, and I refer particularly to the report from the Institution of Fire Engineers on solar power fire risk and to batteryfiresafety.co.uk.

I have a couple of points to add to the comments already made as to whether it would be worth directing information about the storage of the batteries. It should be highlighted in particular that batteries are often stored in garages next to parked cars, which can have similar battery systems, and will not always be easily accessible.

The risks of lithium ion batteries from a fire safety perspective apparently have been well documented. However, the other element is that the risk with lithium ion batteries is not just fire. Once the battery fails—I think the term is “runs away”—the cells usually start to give off smoke. Thermal runaway is the chemical process within the battery which produces heat, as well as flammable toxic chemical gases, very quickly, often before any flames arise.

I think it is fair to say that, although the information is out there, it has not been properly documented. I wonder whether the health and safety considerations of the increasing use of these batteries and solar panels have been taken on board. Does the Minister think that there is a problem and, if the answer is yes, what does she propose to do about it?

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank the noble Lord for his amendment on requesting a report into the fire risks of photovoltaic panels, lithium ion battery storage facilities and similar technologies. I was delighted to hear of his welcome in the Budget for the VAT exemptions.

First, I reassure the noble Lord that the health and safety regimes surrounding net-zero technologies are a priority for the Government. All electrical equipment requires safe installation and use. The Government recognise the importance of net-zero technologies such as electricity storage and solar PV in their ability to help us to use energy more flexibly and decarbonise our electricity system cost-effectively.

The data collected so far indicates that the risk from solar PV fires is low. However, it is right that we work with the industry to understand why any incidents happen and help to stop future occurrences. Over a three-year period and an overall cost of £135,000, the Government commissioned the Building Research Establishment to develop new guidelines for PV system installers, designers and the fire services, with the aim of making solar PV even safer. In February this year, the RISC Authority, the Microgeneration Certification Scheme and Solar Energy UK published an updated joint code of practice on recommendations for fire risk prevention in UK solar systems. Grid-scale lithium ion battery energy storage systems are covered by a robust regulatory framework, which requires manufacturers to ensure that products are safe before they are placed on the market and installed correctly, and that any safety issues found after products are on the market or after installations are dealt with.

In 2018, the Government set up an industry-led electricity storage health and safety governance group, which is responsible for ensuring that an appropriate, robust and future-proofed health and safety framework is sustained as the industry develops and electricity storage deployment increases. The Government are currently working with the group to support the development of a product and installation publicly available standard for domestic small-scale battery storage and guidance for grid-scale storage. They will both be published this year.

Most of the specific issues of e-scooters and bicycles fall within the remit of the Office for Zero Emission Vehicles, and I shall ask it to write to the noble Lord. I can also confirm that Defra will soon publish a consultation on battery recycling.

I do not believe that a specific report on fire risk of photovoltaic panels, lithium ion battery storage facilities and similar technologies mandated by the Secretary of State is necessary. While I welcome the noble Lord’s intention, we believe that working alongside industry and the fire services to manage specific risks is the appropriate way forward. It ensures that these vital technologies are installed, operated and decommissioned in a safe way, while still delivering the best outcomes for consumers. I hope that the noble Lord can recognise the Government’s sustained commitment to enabling the deployment of net-zero technologies in a safe and sustainable way.

In addition, on the concerns expressed by the noble Baroness, Lady Blake, about lithium ion batteries and their ability to combust, I visited last week a very clever packaging firm called Tri-Wall in Monmouth, which has developed packaging specifically for lithium ion batteries to be transported by air safely. The packaging itself will detect any change in heat in the batteries that it contains and change the structure of the packaging into water that will put the fire out before it even gets out of the packaging. Very clever technologies are being developed specifically around lithium ion battery transport and storage.

I hope that, with those few reassuring remarks, we can ask the noble Lord to withdraw his amendment.

Energy Bill [HL]

Baroness Blake of Leeds Excerpts

Report stage
Tuesday 28th March 2023 Lords Chamber

[Baroness Sheehan (LD)]

My Lords, I declare my interest in the register as a director of Peers for the Planet.

I shall speak to only one amendment in this group, Amendment 33, in the name of my noble friend Lord Teverson, to which I have added my name. It aims to ensure that decommissioning funds, as the noble Lord has explained, are available for decommissioning when the time comes. I support it not least because it complements Amendment 222A, which I tabled in Committee, on transparency of decommissioning, particularly with respect to future taxpayer liability for decommissioning relief deeds, which are agreements between the individual oil and gas companies and the Treasury. The National Audit Office and the Public Accounts Committee have both expressed concern about this public liability. I quote from the 2019 NAO report on decommissioning:

“With decommissioning activity increasing, the government is paying out more in tax reliefs for decommissioning at the same time as tax revenues have fallen due to a combination of lower production rates, a reduction in oil and gas prices and operators incurring high tax-deductible expenditure.”


That represents a triple whammy for UK taxpayers since, as the report says, for the first time ever, in 2016-17,

“the government paid out more to oil and gas operators in tax reliefs than it received from them.”

The scenario under which that public subsidy of oil and gas production took place in 2016-17—that is, the triple whammy of lower production rates, a reduction in oil and gas prices and operators incurring high tax-deductible expenditure—is the future outlook for the gas and oil sector as the world moves ever more rapidly towards decarbonisation. The USA’s inflation reduction Acts and the imminent EU response via the green deal industrial plan will turbocharge that transition, and rapid transformative change is very visible on the horizon.

While oil and gas expansion currently looks secure, it is only artificially so, given the very generous tax reliefs, subsidies and other support that the Government continue to provide, not least via decommissioning relief deeds. With over 100 new licences for exploration and production on offer, the risk of stranded assets is compounded hugely. Why do the Government persist in giving preferential treatment to fossil fuel producers? That is a question that I have put to the Minister before on several occasions, and I hope that this time there might be an answer.

It used to be that a ceiling of sorts was kept on the overall cost to the taxpayer by the fact that a firm could not claim back more in decommissioning tax relief than it had previously paid in tax. That makes sense but, since 2017, the Government have explicitly said that when firms default the partner firms that pick up the bill can claim back more in tax relief than they have ever paid. That certainly needs some digesting.

It cannot be right to put on life support an industry that has had its day—life support that is publicly funded. The amendment asks the Government to take precautions with the public purse, uphold the “polluter pays” principle and ensure that operators of new fields and buyers of existing ones accept that they cannot escape their responsibility to our planet, the one and only planet that we have.

[Baroness Blake of Leeds (Lab)]

My Lords, in speaking to the amendments in this group, I particularly thank my noble friend Lady Liddell for the well-informed and detailed explanation of why the amendments in her name and that of my noble friend Lord Foulkes are so important and relevant. What we heard was the crossover between the considerations within these amendments and the discussions that we had on the previous group regarding the work that we believe needs to be done to strengthen the hand of Ofgem, particularly to justify and evidence decisions, as we heard, enabling strategic anticipatory investment.

--- Later in debate ---

[Baroness Worthington (CB)]

My Lords, I added my name to Amendment 18 in respect of who should be paying a hydrogen levy. I do not consider that hydrogen is going to play a large role in our broader economy. I think it will have specialised uses: it will be used where it is already used, in the production of fertilisers and in certain chemical processes, and it may well be used as a back-up fuel in extremis when we have no other forms of storage. I say that because it is going to be a relatively expensive commodity, it is not going to be easy to handle and it is not necessarily going to be very safe. For those reasons, I think we are overexcited about hydrogen in general, and the Bill is overexcited about hydrogen—and probably, as a result, about carbon capture and storage, which will also be quite expensive.

The reason I lent my name to this amendment is that it seems particularly egregious to expect electricity billpayers to be picking up the price of this expensive commodity, which is not very safe and quite unlikely to be very useful. Therefore, I think it is really important that the Government listen, and listen to everyone outside this Chamber who is saying that we should not be loading any more costs on to electricity consumers but should be doing the opposite. I am looking forward to the Government taking on this issue to redress the balance of how we are tackling climate change and who is paying. At the moment, the electricity consumer is paying nearly everything and the gas consumer almost nothing.

It is time that we started to recognise the value of electricity. It is hugely efficient, and it can be indigenously produced from our nuclear and homegrown renewables and offshore wind. It is that which we should be supporting, not necessarily this rather expensive alternative. Gas, oil and coal companies will continue to promote it, but it is not for the electricity billpayer to pick up the tab. So I fully support Amendment 18.

I would love to hear a little more from the Minister on new subsection (3) inserted by Amendment 20 in relation to the regulations. It is my understanding that that will enable payments to be made back to consumers, but could those regulations also decide not to impose any hydrogen levies on electricity consumers? I would like to understand the extent to which those regulations could solve this problem.

[Baroness Blake of Leeds (Lab)]

I make reference to the Minister’s amendments, particularly the issue he highlighted of including the new subsection that would allow regulations to make provisions requiring that energy consumers benefit. I want to ask just one question on that. While we welcome that provision, there is a concern. If we are allowing regulations to make this provision, what guarantee is there that they will actually be used? Are the Government committing to using them, if they use Clause 66 powers?

I support all of my noble friend Lady Liddell’s comments on her amendment. The main amendment for me is that just referenced by the noble Baroness, Lady Worthington. We spent a significant amount of time talking about this area in Committee, so I will not go through all the detail. However, as the noble Baroness mentioned, in the circumstances we are in, with the extra pressure on the cost of living from energy bills, why are we looking at a situation where we could be asking householders to pay more money? I acknowledge that there will be further consultation but I hope that, as well as it being done thoroughly, its conclusions will lead to the spirit of our amendment. As shown in our amendments, we believe that the Secretary of State could put a levy on gas shippers but not on gas and electricity suppliers, thus preventing responsibility for the levies falling on households.

We need to reflect on the spirit of the Bill—the whole idea is that, while reforming energy systems, we do everything we can to protect consumers and their ability to pay their bills. Every possible action should be taken to minimise the impact on consumers, focusing always on affordability. I am disappointed that the Minister has not gone further on this point. Unless he indicates a willingness to do so, due to the strong feelings surrounding the protection of consumers from inflated bills, I am minded to test the opinion of the House.

[Lord Callanan (Con)]

My Lords, I will start by addressing Amendments 18 and 19, which the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake, have retabled from Committee. I thank the noble Baroness, Lady Worthington, for her contribution. She requested further detail; I will provide clarification in writing, if that is okay with her.

These amendments seek to ensure that funding for the hydrogen production business model can be provided through the Consolidated Fund. They also seek to restrict where a levy may be placed, removing the option for levying energy suppliers and requiring that a levy could be placed only on gas shippers. They are intended, I assume, to take responsibility for levies away from households.

The powers in the Bill already enable Exchequer funding of the hydrogen production business model, which will initially be Exchequer-funded. It is therefore unnecessary to include additional provisions that enable the business model to be funded through the Exchequer.

The proposal in these amendments to require that the levy could be placed only on gas shippers will limit options for the levy design, with possible implications for its costs and ultimate impact on consumers. There is no such thing as a free lunch. A gas shipper levy would be a completely novel scheme, with administration and set-up costs that could be considerably higher than those required to implement a supplier levy; this is well understood.

The Government have set out their intention not to levy gas shippers in the near term. Levies on energy suppliers have been used in the past to support the deployment of low-carbon electricity and increase the proportion of green gas in the gas grid. These levies are well understood by the private sector. By taking a similar approach with the hydrogen levy, we can help provide investors with the confidence they need to invest in low-carbon hydrogen production projects and support the delivery of our 10-gigawatt production capacity ambition.

By seeking to ensure that the levy could be placed only on gas shippers, these amendments appear to try to protect energy consumers from the costs of a levy. However, as I outlined when they were tabled previously, we anticipate that any costs associated with a levy on gas shippers would ultimately be passed on to energy consumers in a very similar way to levies on energy suppliers. As I say, there is no such thing as a free lunch. It is the opinion of all the policy analysts that it is unlikely that the amendments would have their intended effect.

--- Later in debate ---

Moved by

[Baroness Blake of Leeds]

18: Clause 66, page 57, line 25, leave out “relevant market participants (see subsection (8))” and insert “the Consolidated Fund or gas shippers”
Member's explanatory statement
This amendment means the Secretary of State may put a levy on gas shippers, but may not put it on gas or electricity suppliers, thus taking responsibility for levies away from households.

[Baroness Blake of Leeds (Lab)]

My Lords, on behalf of consumers I express my disappointment in the Minister’s response, and I would like to test the opinion of the House.

--- Later in debate ---

My instinct says that the best place for fossil fuels is in the ground, out of harm’s way. Any system that perpetuates their production must also ensure that we bear down meaningfully on reducing their production. Only the hardest-to-abate residual emissions would be captured and locked away, and I hope the industry will pay for it. With that proviso, ultimately I support this amendment because I too want to see carbon capture and storage a reality. It may well be that DAC—direct air capture—will be necessary to stop runaway climate change. It seems right that storage facilities should be developed and paid for by the companies that made it necessary.

[Baroness Blake of Leeds (Lab)]

I will speak to Amendment 40 in the name of the noble Baroness, Lady Worthington. I acknowledge that this will be her last meeting for some time; I think I am allowed to say that. In my relatively short time here, I have come to value her passionate interjections and her incredible knowledge on the subjects on which she has spoken. I wish the noble Baroness well in her temporary visit overseas and look forward to when she is able to come back and join us. I hope that we can keep in contact in the meantime.

While we do not support new fossil fuel extraction licences, we have to be mindful of existing licences and renewals. We have to take these issues seriously.

It is fair to say that we do not want to turn off the taps, so there will be merit in reducing carbon emissions from those existing licences. To what extent are the Government considering geological storage as a solution? I am sure we have all received briefings giving us the background on how successfully CO₂ has been stored over many years. There is an opportunity, but how much can be stored, and can we make full potential of the opportunities that are presented to us off the shores of this island?

[Lord Callanan (Con)]

I also pay tribute to all the work that the noble Baroness, Lady Worthington, has done. It is indeed a great mystery to all of us why she seemingly wishes to swap the lovely, warm, calm weather of southern England for California, but I suppose that will become clearer over time. I thank her for the contribution she has made, and I am sure that we will hear a lot more from her in the future.

I am happy to contribute to this debate on Amendment 40 and the issue of the carbon take-back obligation for fossil fuel extraction. The concept of such an obligation is indeed worthy of debate, but the noble Baroness will understand when I say that its inclusion in the Bill is a little premature. Our primary instrument to decarbonise the UK economy is the emissions trading scheme, which provides a market price for emissions of carbon dioxide, incentivising investment in decarbonisation and ensuring that it happens wherever—and however—it is most cost effective to do so.

Introducing a carbon take-back obligation now, at such a pivotal time for the development of CCUS in the UK, could create uncertainty for industry and have a detrimental delaying effect on investment, resulting in investors looking to opportunities that exist in many other countries—perhaps even in California; one never knows. Such an obligation could also increase the costs of CCUS, making UK production of steel, chemicals, refinery products and other industrial products more expensive than that of their competitors, potentially impacting on our industrial competitiveness. All these issues need further detailed policy consideration before further legislation can be considered.

As I mentioned to the noble Baroness before the debate, the CCUS Council is the Government’s primary forum for engaging with representatives across the CCUS sector, and we have indeed asked the council to consider and provide advice on carbon take-back obligations. The concept indeed warrants further consideration, but I am sure the noble Baroness will accept that it is not for this Bill at this time. With that explanation, I hope she will feel able to withdraw her amendment.

Alternative Fuel Payment Pass-through Requirement (England and Wales and Scotland) Regulations 2023

Baroness Blake of Leeds Excerpts

Tuesday 14th March 2023 Grand Committee

[Lord Callanan (Con)]

My Lords, I was just moving on to the issue of enforcement. The approach in these instruments is consistent with other energy schemes. If an intermediary does not pass on the benefit to an end user who is entitled to it, that end user will be able to pursue recovery of the benefit debt through civil proceedings. Should a court rule in the end user’s favour, they would be entitled to the payment plus interest. The interest is set at 2% above the Bank of England’s base rate.

The Government have published guidance on the GOV.UK website to ensure that requirements are clear to all parties. The guidance includes template letters to support end users, such as tenants, which they can use to contact their landlord should they be concerned about their energy bills. We are of course mindful of the concerns that this House and the other place have raised with us about enforcement. The Government will continue to keep the scheme under review. We will continue to work with a wide range of stakeholders to ensure that these pass-through requirements work for everyone who is in scope, including vulnerable groups. We want them to receive what they are entitled to.

In conclusion, these instruments are vital to ensure that support reaches the people it is designed to help. They are essential to the effectiveness of the alternative fuel payment scheme in Great Britain and the non-domestic alternative fuel payment across the United Kingdom. They will ensure that intermediaries pass on the support to those who really need it: those households and non-domestic energy customers who are most vulnerable to high energy costs. It is for all these important reasons that I commend these regulations to the Committee.

[Baroness Blake of Leeds (Lab)]

My Lords, I thank the Minister for a very full explanation of the SIs before us. I am pleased that the Government have fully caught up with the need to support consumers; I slightly disagree with the suggestion that this was done in a timely manner, but we and many others out there know about that. There was concern over a rather difficult period for the Government over the summer months but, on the back of this, I can underline that we will not oppose these SIs. We welcome them and want to see the help and relief that we have been discussing passed on, through the pass-through arrangements, so that people get the relief when they do not get the upfront sums directly.

Carbon Budgets: Methane Flaring

Baroness Blake of Leeds Excerpts

Thursday 9th March 2023 Lords Chamber

[Lord Callanan (Con)]

My noble friend makes a good point, and I touched on it in an earlier answer. We want to try to trap as much of this gas as possible because it is a valuable resource. As I mentioned, the green gas support scheme is a system that uses a gas levy to support anaerobic digesters across the country to take some of the waste food and organic matter that can be turned into useful gas that is fed into the gas main.

[Baroness Blake of Leeds (Lab)]

My Lords, methane flaring accounts for approximately 145 billion cubic metres of gas per year globally, contributing to the overall methane emissions that cause 25% of global heating today. We can dispute the studies; indeed, I shall reference the study in the journal Science that came out last week which found that methane flaring is responsible for five times more methane entering the atmosphere than previously thought. I am quite taken aback by the complacency here. Does it not at least warrant further consideration if studies are disputing the evidence that the Minister has cited today? Bearing that in mind, and given the worries about the recent surge that have been highlighted, what progress is being made on farming and landfill, as has been mentioned? I do not think we have had the detail. When can we expect the Government to produce the latest, much-promised plan to achieve all targets and net zero?

[Lord Callanan (Con)]

The noble Baroness asked a number of questions there. We can argue about the figures but we can all agree that it is something that we want to eliminate as quickly as possible. We have a target to get rid of all flaring emissions by 2030, as I mentioned in earlier answers, but let us not get this out of proportion. These are 1.6% of our emissions, which we should eliminate as quickly as possible, but, as the noble Baroness mentioned, the bigger sectors to tackle are agriculture and waste, as other noble Lords have mentioned.

Green Investment

Baroness Blake of Leeds Excerpts

Tuesday 7th March 2023 Lords Chamber

[Lord Callanan (Con)]

My noble friend makes an important point. I know how committed he is to and how hard he works for the principle of international free trade, which we totally support. We want to engage with the US on these matters but we need to convince it and, of course, the EU that free, fair and open trade benefits everyone. That is the key point that we need to put across to them.

[Baroness Blake of Leeds (Lab)]

My Lords, the scale of potential investment in both the US Inflation Reduction Act and the EU green deal shows a key recognition of just how much opportunity there is in investing in net-zero projects. The European Commission cites 35% to 40% of all jobs as potentially affected by the green transition, while analysis by Princeton University’s REPEAT project suggests that the policies in the US Act will create hundreds of thousands of jobs. Any leakage of investment away from the UK will also leak jobs, as the Question from the noble Lord, Lord Teverson, suggests. I ask the Minister to be specific about what steps the Government have taken to protect these opportunities for our communities to level up. For example, can we expect to see reference to this in next week’s Budget?

[Lord Callanan (Con)]

The noble Baroness would not expect me to go into detail but we will set out our plans shortly. However, it is important to recognise that the UK has made excellent progress in attracting private investment into low-carbon sectors. PwC’s 2023 annual global CEO survey found that the UK is now in the top three in the global investment market, second only to the US and China. Bloomberg New Energy Finance estimated that, in 2021 and 2022, the UK saw £48 billion of net-zero investment coming into the UK.