High Temperature Gas-Cooled Reactors

Lord Hunt of Kings Heath Excerpts

Monday 19th January 2026 Lords Chamber

[Lord Vallance of Balham (Lab)]

My noble friend is right that there are many different technologies coming along, and one of the reasons why we put the advanced nuclear framework together is to make it possible for all those technologies to have a pathway through to production in the UK. This is an important moment, when private-sector leadership of nuclear is real and can happen because of the new designs. We welcome all the different technologies as part of that framework, which, as I say, will be published shortly.

[Lord Hunt of Kings Heath (Lab)]

My Lords, perhaps in contrast to my noble friend, I congratulate the Government on the final investment decision on Sizewell C and the SMR programme by Rolls-Royce at Wylfa. This is the foundation for a fantastic new nuclear industry in the UK. But does he agree that in welcoming private-sector investment, we need to look at siting policy and making it more flexible, as the recent taskforce recommended?

[Lord Vallance of Balham (Lab)]

On the first part of my noble friend’s question, he should partially congratulate himself, because he was very involved in making that happen, and I join him in congratulating him. We have a very significant nuclear programme with SMRs coming along; and the Fingleton review and a series of other processes, including EN-7, which was laid on 18 December, make planning and other aspects much easier. Siting is very important. A siting review, by GBN, is going on at the moment, looking at potential sites for future gigawatt production as well; it will report in the autumn.

COP Climate Negotiations: Cities

Lord Hunt of Kings Heath Excerpts

Wednesday 14th January 2026 Lords Chamber

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

My Lords—

[Lord Hunt of Kings Heath (Lab)]

My Lords, on behalf of my noble friend—and, I assume, with his consent— I beg leave to ask the Question standing in his name on the Order Paper.

[Lord Whitehead (Lab)]

I thank the noble Lord for the Question. I was so eager to answer that I was up before he asked it.

The Government recognise the essential role that local places, including cities, play in accelerating to net zero and taking climate action. The Government regularly engage with C40 cities and other interested non-governmental and civil society organisations on the international climate negotiations. This engagement helps to inform our negotiating mandate each year for the COP—the Conference of the Parties. The UNFCCC and the governing bodies comprise more than 190 states and the European Union, which are signatories to the respective treaties. As a multinational treaty body process, negotiations are therefore primarily among parties’ government representatives. In giving this Answer, I pay tribute to the immense work that the noble Lord, Lord Rees, has done in this area, in terms of cities within the UK and on an international basis.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I endorse the Minister’s tribute to my noble friend Lord Rees. Does he agree that when it comes to countries such as the US, where the Administration have set their face against policies in relation to both mitigation and adaptation, the role of states, local authorities and businesses in flying the flag for determined progress in relation to climate change is vital and that, as a country, we should therefore engage as much as we can with local authorities in those countries because of the contribution they can make?

[Lord Whitehead (Lab)]

I heartily endorse that sentiment, particularly given that there are 14 US cities in the C40 group and over half of US states already have climate change commitments and net-zero mandates within their areas. We can see that even if the United States has decided at the federal level to take its bat home as far as climate change is concerned, there will still be a lot of work done at state and city level. As a country, we should engage fully with all those actors at the various levels of the United States administration.

Oil and Gas Authority (Carbon Storage and Offshore Petroleum) (Specified Periods for Disclosure of Protected Material) Regulations 2026

Lord Hunt of Kings Heath Excerpts

Monday 15th December 2025 Grand Committee

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

My Lords, these technical regulations were laid before the

As set out in the Energy Act 2023, carbon storage licensees are responsible for complying with various obligations, including the reporting of information and samples obtained through the conduct of licensee authorities to the NSTA. We believe that the wealth of data that carbon storage licensees gather during exploration or storage activities is a national resource and its publication will accelerate the deployment of CCS in the UK. That is why we introduced the Oil and Gas Authority (Carbon Storage) (Retention of Information and Samples) Regulations 2025, which came into force in May 2025. These regulations specify the types of information and samples that carbon storage licensees must retain and the periods for which they must retain them.

The regulations we debate today set out when the NSTA can publicly disclose carbon storage information and samples provided to it by carbon storage licensees, and which types of information and samples may be disclosed. They also amend when the NSTA can publicly disclose information on the drilling or operation of wells under offshore petroleum licences. The timeframe for this was set out in the Oil and Gas Authority (Offshore Petroleum) (Disclosure of Protected Material after Specified Periods) Regulations 2018—try saying that in one breath—and this amendment to the 2018 regulations will bring the NSTA disclosure powers across CCUS and offshore petroleum into alignment.

Information and samples play a very significant role in the UK carbon dioxide storage industry, and access to high-quality data for the NSTA, industry, academia and the public will enable efficient use of the UK’s storage potential. The carbon storage information and samples published will support sharing of knowledge and lessons learned, including best practices and innovation, ultimately leading to cost reductions and advancement of the sector. This includes accelerating the North Sea energy transition. The NSTA helps drive this transition by realising the significant potential of the UK continental shelf as a critical energy and carbon-abatement resource. These regulations will further provide opportunities for the industries based offshore, with the very significant potential that exists for storing carbon dioxide in depleted oil and gas fields and other geological formations in the UK continental shelf.

The NSTA has consulted on both the carbon storage and offshore petroleum aspects of these regulations. The consultation on the amendment of well data confidentiality closed in September 2022 and a response was published in February 2023. The consultation on the proposed regulations for the disclosure of carbon storage information and samples closed in April 2024. That consultation will ensure that the regulations are effectively introduced. A response was published in October 2025. This means that the feedback received from those consultations was positive and has been carefully considered in shaping these regulations to ensure that they reflect industry needs and best practice.

CCS is not optional; it is essential for Britain’s energy security and industrial competitiveness, and for our clean-power future. These regulations may be technical, but their impact is profound. They unlock a wealth of data that will accelerate deployment, drive innovation and maximise the UK’s carbon storage potential. This is about making Britain a clean energy superpower, safeguarding jobs, securing investment and delivering net zero in a way that strengthens our economy. I urge the Committee to approve these regulations without delay.

The regulations reflect extensive consultation and positive engagement with industry and stakeholders. They are practical, robust and future-focused, designed to ensure that the UK remains at the forefront of clean energy technology. This is about more than disclosure; it is about delivering on our net-zero commitments, safeguarding energy security and creating opportunities for growth and jobs in the industries of tomorrow. I beg to move.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I very much welcome the regulations and totally agree with my noble friend about the importance of CCUS to meeting our net-zero targets. Only a few weeks ago, the Whitehead review made the same point about GGRs: you cannot achieve net zero without this. I look forward to my noble friend responding to the Whitehead review and no doubt accepting all its recommendations.

These regulations seem to fall within what the review said about regulation. Certainly, I very much agree that this is an important element for market investment and certainty. Paragraph 5.4 of the Explanatory Memorandum says that the UK continental shelf holds

“an estimated 78 billion tonnes of theoretical CO₂ storage capacity”.

Clearly, there is huge potential for the UK. The Explanatory Memorandum mentions that, potentially, there are many countries that we could reach agreement with for storage in the UK continental shelf. So, can my noble friend tell the Committee the extent to which we are now in discussion with some of our European neighbours about the huge potential of storage in the North Sea?

[Earl Russell (LD)]

My Lords, we welcome these regulations, which seek to establish a necessary legal framework for the public disclosure of protected carbon storage information and samples. These are crucial steps towards fostering a transparent culture in the UK’s nascent carbon capture, usage and storage—CCUS—industry. As has been said by others, CCUS is essential for the UK to meet its net-zero carbon targets and budgets—particularly as set out by the Climate Change Committee—and the sector is projected to support up to 50,000 jobs and significant future economic growth. As has also been pointed out, the UK’s continental shelf is estimated to hold up to 78 billion tonnes of theoretical CO₂ storage capacity, so this is essential in helping us meet these targets and creating the green jobs and growth of the future.

We support the principles of transparency set out in Parts 2 to 4 of the regulations, which govern the storage data obtained by the OGA, operating as the North Sea Transition Authority—the NSTA. We welcome the approach, as set out, of clarifying data based on levels of commercial sensitivity; this is sensible and pragmatic. We also welcome the decision that non-commercially sensitive items will be published straightaway. For more sensitive material, the NSTA has established clear and time-limited protection periods before disclosure. For example, detailed well information, protected carbon storage samples and computerised model information may generally be disclosed, but only after a period of two years. These two years are designed to protect licensees with sufficient exclusivity for the data they have paid to acquire.

On the regulations that relate specifically to the two-year period for the disclosure of computerised model information—relating specifically to the creation of CO₂ storage models that stimulate flows of fluids in storage complexes—the NSTA has acknowledged the need for further detailed consultation. Does the Minister know when those further consultations might be completed?

Other data is classified as highly sensitive, particularly in relation to storage resource information, quality of CO₂ that could be stored and substrate geology—that kind of thing. I note that the NSTA provides the ability, but not the obligation, to disclose protected material, so licensees will have an opportunity to make representations concerning the delay or withholding of disclosure. That protective mechanism is important, and I recognise the need for it in the regulations, but I simply ask the Minister: what is the minimum timeframe for representations that the NSTA will guarantee to licensees before commercially sensitive protected material is disclosed?

We generally welcome these regulations and think that they are crucial for the development of this sector. This instrument is crucial for safety and for ensuring that there is a balance between the sharing of information and protecting what is commercially sensitive. We feel that, in general, the balance is in the right place here. We support these regulations as they will help underpin the successful, transparent and efficient development of the UK’s potential CCUS industry. But we urge the Government to address these essential questions of implementation, technical definition and scope, in order to ensure that the regulations achieve their full potential.

Drax

Lord Hunt of Kings Heath Excerpts

Wednesday 10th December 2025 Lords Chamber

[Lord Whitehead (Lab)]

No, I do not agree that the various connections relating to Drax could be better used for an SMR programme, because of the particular location of Drax within the cluster in the north-east of the country, which is particularly important for carbon capture and storage, and, indeed, hydrogen. Drax plays a part in that process in that area. The noble Baroness perhaps ought to read the report that is before us very carefully, because it does not actually say that Drax has sourced old-forest timber. Timber is sourced from third parties, goes into the Drax pellet facility, and may or may not to Drax’s knowledge include old-forest material—which, by the way, is outlawed by the Government of British Columbia. There are a number of questions to answer, but not necessarily for Drax. There are a number of people who perhaps have questions to answer as well.

[Lord Hunt of Kings Heath (Lab)]

My Lords, on the subject of questions to be answered, does my noble friend not think it surprising that the noble Baroness, Lady Bloomfield, intervened, given that it was the party opposite—the Conservatives—that, in government, signed contracts with Drax? The scale of the subsidies as a result was very large indeed.

[Lord Whitehead (Lab)]

My noble friend makes a very sound point, in that the new contract that has been signed costs taxpayers half as much as the old contract did. It is on more sustainable terms and, as I have said, makes Drax move towards being a dispatchable plant, which is much more in line with the power grid generally, than any of the things that were done under the previous Administration.

National Policy Statement for Nuclear Energy Generation

Lord Hunt of Kings Heath Excerpts

Wednesday 21st May 2025 Grand Committee

Moved by

[Lord Hunt of Kings Heath]

That the Grand Committee takes note of the proposed National Policy Statement for Nuclear Energy Generation.

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

My Lords, I welcome the opportunity to discuss the new National Policy Statement for Nuclear Energy Generation EN-7, which was laid before the House on 6 February. In particular, I welcome the noble Baroness, Lady Maclean of Redditch, who is making her maiden speech. Redditch is not a million miles from Kings Heath, and it is great to welcome a fellow West Midlander to your Lordships’ House; I am sure we anticipate her contribution very much indeed. I am aware that the noble Lords, Lord Liddle and Lord Inglewood, have both withdrawn because they wish to be present for the EU-UK summit Statement, which is to be made shortly.

The Secretary of State and the Government have been clear that nuclear has a crucial role to play in powering Britain’s clean energy future. We see it as making an important contribution to helping the UK become a clean energy superpower, which in turn is a core part of the Prime Minister’s plan for change. For nuclear to play that crucial role, we need to support the construction of new power stations, including by improving how the planning system deals with such proposals. We have already introduced important reforms in the Planning and Infrastructure Bill, which I understand will be before your Lordships shortly. These will help us to consent to major infrastructure projects more efficiently—for example, by streamlining consultation requirements, providing flexibility in what consenting route is used and removing unnecessary elements of the judicial review process. We are also supporting the production of a strategic spatial energy plan by the National Energy System Operator, which will assess the optimal locations and types of energy infrastructure required to meet energy demand in future.

One of the most important ways we can support major infrastructure development is through national policy statements. These establish the type of infrastructure that is needed and the rules on site selection and mitigating impacts on communities and the environment. The Overarching National Policy Statement for Energy, called EN-1, makes it clear that low-carbon energy infrastructure, including nuclear, is a critical national priority. In a context where electricity demand is expected to double by 2050, even with energy efficiency, EN-1 makes clear that the planning system places no limit on the amount of generating capacity that should be built. This new national policy statement, EN-7, will complement EN-1 and enable nuclear to play its crucial role in four ways.

First, EN-7 states the clear and unambiguous need for new nuclear to achieve energy security, support growth, and mitigate and adapt to climate change. Stating this fact in a national policy statement ensures that it shapes development consent decisions by the Secretary of State.

Secondly, EN-7 will allow, for the first time, developers to consider deploying the full range of nuclear fission technologies at any site in England and Wales that meets its criteria. This brings nuclear into line with other energy subsectors, where businesses routinely explore new growth opportunities without being restricted by assumptions about the scale or location of deployment. This flexibility will support new uses for nuclear, such as combined heat and power, hydrogen production and direct supply to high-demand users, such as heavy industry or AI data centres.

Thirdly, EN-7 imposes a single set of criteria appropriate to nuclear deployment at any scale and in any location. Infrastructure benefits everyone by providing the energy, transport connections, water and waste management capacity we need, but it can impact neighbouring communities and ecosystems. EN-7 supplements the impacts section of EN-1 with nuclear-specific detail on key areas including population density, flood protection and the use of water for cooling.

Fourthly, EN-7 goes further than previous national policy statements in clarifying the development consent process beside regulatory licences. Industry tells us that it is unsure of when and how to engage the various planning bodies and regulators, and that this is driving up costs and slowing delivery. This requires a multifaceted response, but EN-7 plays its part by clarifying that, first, the Secretary of State may decide that the low-carbon energy benefits of nuclear outweigh the residual risks remaining after mitigation; and, secondly, the Secretary of State should grant development consent if they are satisfied that there is no good reason why the project will not eventually gain regulatory approval.

Some of the responses have asked what EN-7 means for the sites listed in the previous national policy statement, EN-6. I want to make it clear to noble Lords that those sites will not be disadvantaged by EN-7, because both national policy statements have consistent criteria. Any of the advantages of the sites listed in EN-6 that are evident in a development consent application will be given great weight by EN-7. For example, EN-7 clearly requires a connection to the grid or end-user. This is what matters in practice when applications for development consent are being decided.

Our public consultation so far has found that stake- holders agree that EN-7 is a positive step forward. We received 77 responses from across industry, local authorities, campaigners and private individuals. A clear majority agree that EN-7 is future-proofed to deal with advancements in technology, applies the criteria properly and takes a sensible, pragmatic approach to population density requirements. A majority also agree with keeping the scope of EN-7 to nuclear projects with a generating capacity of at least 50 megawatts in England or 350 megawatts in Wales.

I also note that most respondents believe that we could do even more to support industry through the consenting and regulatory process. EN-7 could never solve this challenge on its own, which is why we are developing supplementary information for potential developers on the development consent process. Alongside the designation process for EN-7, we will seek input from industry and planning experts over the summer to develop it further.

We are also reviewing the regulatory regime in depth through the nuclear regulatory task force. This is examining measures to better support growth and innovation, including faster approvals of new reactor technology designs; international collaboration, potentially including the recognition of designs approved by other trusted safety regimes; and improved ways of working between regulators and industry. The regulatory task force is progressing swiftly. It completed its call for evidence on Monday this week, and in October it will report to the Prime Minister, the Secretaries of State for Energy and Defence and the Chief Secretary to the Treasury. It is time limited in that respect.

We have received strong support for EN-7. The question of how to site nuclear power in light of small and advanced modular reactors has been pressing for years. We have consulted extensively with industry, planning and environmental experts, as well as the public, and now is the time to implement it.

In the time that I have been in this job, it has become clear that, compared with when we took the decision to go back to new nuclear in 2007, there has been a sea-change in support for nuclear. I believe there is a critical mass of support that recognises that nuclear is the essential baseload for a clean energy system and that we have a huge opportunity to grow and innovate in this country to develop a UK supply chain. I know that there is a certain frustration about a number of critical decisions that have to be made over the next few weeks. None the less, I hope that, as we go through that, we can make positive announcements that will lay the foundation for moving forward. EN-7 is clearly one of the policy statements that underpins the advances we want to make.

I look forward to the contributions of Members of the Committee to this interesting debate. I beg to move.

--- Later in debate ---

[Lord Hunt of Kings Heath (Lab)]

My Lords, the noble Baroness, Lady Bloomfield, is very experienced and knows that departmental spring is not entirely consistent with meteorological science. I very much take the point, however, that we all want to see a final investment decision on Sizewell C—except the noble Lord, Lord Howell—and great progress on the SMR programme.

This has been a really interesting debate, and I just make it clear that the contributions that noble Lords have made today will be fed into the consideration of our final version of EN-7. In a sense, the debate does not finish here; we will make sure that the contributions are considered very carefully by officials before we receive final advice on the contents.

I congratulate the noble Baroness, Lady Maclean, on a very lively, excellent maiden speech. We look forward to her future contributions. She will discover that the West Midlands is not overrepresented in your Lordships’ House, so it is very good to see her here. I did not know about Redditch tights—I now know—but I do know about the potential of Redditch. I also share her view about the need to encourage the aspirations of young people in Redditch, and I know about the work being done on the educational system there to try to improve aspirations, including through access to higher and further education.

This debate has been very encouraging. When I last had this job in 2008 to 2010, there was much more of a mixed view, inside and outside Parliament, about the role of nuclear. There has been a huge change in attitudes and in support for nuclear. We know that from the regular polling that my department has done on public attitude following Putin’s invasion of Ukraine. Among experts and political parties, there is generally now a baseload of support for nuclear, which is really encouraging. Given the long lead times of investment decisions and build for nuclear, having stability for the companies that wish to take this forward is absolutely crucial, as it is in terms of building a UK supply chain. This kind of debate is therefore very encouraging in that respect.

I know that the noble Lord, Lord Howell, was disappointed with EN-7. On future demand, there is clearly a range of estimates for what we need based on assumptions including the extent of electrification, the role of hydrogen and the growth of artificial intelligence. I assure him that we are not wedded to a single estimate, but we clearly have to flex the supply of electricity generation according to how we go forward in relation to the future.

On EN-7 and his argument that it insufficiently mentions SMRs, we believe that EN-7 caters to SMRs throughout. We do not refer to broad categories such as SMRs as planning decisions will reflect the facts of each set of plans rather than what they are called. The different characteristics of SMRs are addressed, particularly when it refers to phased development and cooling, where we recognise that different stations may be cooled in completely different ways.

The noble Lord, Lord Howell, made a number of remarks about Sizewell C that I do not think other noble Lords agree with. I know that he thinks that the replication of Sizewell C in relation to Hinkley Point will not lead to improvements in productivity, but I point him to the improvement in productivity between unit one of Hinkley Point C and unit two. To be fair, we know that Hinkley Point C has had many challenges, and clearly we are all anxious to see further progress made, but it has made progress. There is no doubt that it has learned about how to build on a huge site using the modular approach in many ways. I am convinced that Sizewell C will benefit hugely from it. Pulling the plug on Sizewell C and saying that we will put all our eggs in the SMR basket would be greeted with consternation within the industry. That is not the way to go forward.

I agree with the noble Baroness, Lady Coffey, about the RAB model. That was an important consideration. I was interested in what she had to say about the coalition agreement in 2010, and I still remember the decision made to withdraw support from Sheffield Forgemasters in 2010, which I think was a big mistake. I pay tribute to Sheffield Forgemasters, the work it is now doing and its potential.

On the financing of SMRs, there are plenty of companies which are knocking on our doors saying, “Just give us the green light. We can develop all this. We do not need any public money”. Allow me to be a little sceptical, particularly when it comes to first-of-a-kind development. Coming back to the comments of the noble Baroness, Lady Maclean, about the share of GDP spent on public finances, et cetera, nuclear is one of those areas where you need public and private partnership. Of course we will develop our policies over the next few months, in particular in relation to advanced modular reactors, and look at the best way we can encourage private finance, because clearly we need the private sector to finance the development of AMRs in future. However, at the moment, and we have seen this with Sizewell C, public finance will be involved with the development of SMRs. Public finance is involved.

Clearly noble Lords are impatient for us to get to the end of the current programmes. We have basically inherited GBN’s assessment of SMRs. We cannot intervene now. It is working as hard as it possibly can to get decisions to government very quickly. Of course it is then tied into the spending review process, as it has to be, but the spending review outcomes are going to be known within a very short space of time. I do not accept that we are at risk of falling behind. I know from various discussions that I have had with other countries that there is huge interest in the GBN process. I hope that at the end of the process we will have a decision that will enable us to go forward with confidence and with the huge opportunity of developing a UK supply chain.

On the various contributions of the noble Lord, Lord Ravensdale, I first thank him for all the work he has done in the Midlands, showing the potential that we have in the Midlands, both east and west. He and his colleagues, uniquely, have brought the east Midlands and the West Midlands together, which as he and anyone living in the Midlands will know, is one of the greatest challenges known to men and women. Even though Brum is only a few miles away from Derby and Leicester, pulling them together is hard. He and his colleagues have done that and my department is very interested in the work that he is doing. I have already met him and I hope that he will carry on this work. It is worth saying that we already have huge assets. For instance, at the grid in Warwick, we have great skills and I am sure that we will contribute more in the future. That is probably not a departmental view, but noble Lords will know where I stand on these matters.

On community support, I very much take the point. It is an unknown quantity at the moment. With the existing sites that are listed in EN-6, we know that there was broad support in the local community for the development of new nuclear. We do not really know what the appetite will be in those areas that are new to nuclear. I take the point about the need for communications—mainly by the developers but I accept that the Government have a role. I should say that today we published our Community Benefits and Shared Ownership for Low Carbon Energy Infrastructure working paper for consultation, which may be helpful in encouraging communities to host infrastructure, receiving high-quality benefits in a consistent manner by building on existing voluntary approaches to community benefits.

On the noble Earl’s point about the Strategic Spatial Energy Plan, this will not be limited by EN-6 but will be consistent with it, as it obviously should be in EN-7. He asked about the threshold of 50 megawatts in England and 350 megawatts in Wales. This applies to planning applications, so it would naturally incorporate entire projects and entire sites. We think it unlikely that a developer would split a complex nuclear project into multiple planning applications to try to game the system. If they did, we could call in the applications and treat them as nationally significant infrastructure projects. I think that, given the scale of investment that is concerned, that is very unlikely.

I turn to the comments made by the noble Baroness, Lady Coffey, I take her point on population density. We had a lot of discussions about that before we published EN-7 and we are continuing to look at it in the EN-7 consultation. Any change we make has got to be broad-based and based on strong evidence. There is obviously a balance between safety, certainty of industry and public confidence. We are still considering this point. We are of course reviewing the national policy statement at least every five years and the review will give us an opportunity to revisit this as evidence develops and we gain experience of community attitudes in, say, urban populations, which we do not really know at the moment.

A very important point was made about water. EN-1 requires applicants to consider water quality and resources in detail, covering both construction and operation. Obviously, they need to engage early with the Environment Agency and water companies, but it is a substantive point. Of course, we have the more general issue of the need to build reservoirs, and I am well aware of some the discussions taking place about this at the moment.

My judgment on Sellafield, having revisited it after a gap of 14 years, is that it has made considerable progress. There is a long way to go, but I pay tribute to the work that is being done, the current leadership at Sellafield and the good relationships it has with the workforce. My judgment is that we need to see Sellafield as part of the future rather than just a legacy of the past. The skills developed at Sellafield—and, generally, in nuclear decommissioning—contribute to the industry as a whole. Confidence in the future and new nuclear depends on our being seen to deal with waste and decommissioning as effectively as possible.

We did not know that the noble Lord, Lord Wigley, was such an expert and had such experience. His constructive approach to new nuclear in north Wales is very much appreciated. He has made the point to me, and I very much accept it. He will know that Wylfa offers many attributes; that is why it is listed in EN-6. I also understand the issue about Trawsfynydd and isotope production. Isotopes are a matter for my colleagues in the Department of Health, and I encourage the noble Lord to talk to them about that.

I visited Wylfa in 2009 and met many people in the workforce there. At that point, they were very keen to see nuclear development continue. It is a matter of great regret that the Horizon project fell apart, but we certainly consider Wylfa to be a site that offers many attributes.

On the issue of the sites listed in EN-6 that missed out, we are saying, in essence, that we have those sites and they continue to have much to offer, but we want a more flexible siting to allow more areas to come in. Before this was published, I was very keen not to suggest that, suddenly, the sites we listed in EN-6 were being overlooked, because they are not. Clearly, they offer many advantages.

My noble friend Lord Browne made a number of important contributions. On Scotland, it is interesting that, between 2004 and 2021, nuclear energy accounted for 25% to 43% of annual electricity generation. Scotland has this hugely rich heritage, and it is a tragedy that, at the moment, we cannot see new nuclear developments in that country. Let us hope that we see a change.

My noble friend’s remarks on the COP declaration on nuclear energy—on the risk of proliferation and the security issues that arise—were very important. The COP declaration itself and the addition of a number of countries—which, as he mentioned, was announced in the previous COP—are to be encouraged.

We are strong supporters of the International Atomic Energy Agency, which has such a vital role to play on nuclear deproliferation. Its work in Ukraine over the past year or two has been amazing and the people involved in that deserve great credit. The UK is one of its strongest supporters and is acknowledged as such. I have had a series of meetings with the agency to talk about these matters.

I totally agree with my noble friend about the UK’s potential with the SMR programme globally. I know that we need to make progress quickly, but we have not missed, and will not miss, the boat. We have a great opportunity.

I very much take the point made by the noble Earl, Lord Russell, about the energy needs of AI, which will make huge electricity demands but can make great contributions to improving our energy efficiency and the efficiency of the whole energy sector. We want AI to be linked to decarbonised energy. That is what is so exciting about what is happening in the US and the support that companies such as Amazon are giving to AI centres linked to nuclear power stations. We are looking at that carefully. Over the next few months, we want to work to ensure we have policies that make it as easy as possible for these to be developed using funding from private finance. The noble Earl asked me a question about one or two SMRs. He does not really expect me to be in a position to answer that. We will just have to be patient at this point.

Geological disposal is important, of course. EN-7 makes a number of points about waste, its importance and how it needs to be factored into the developers’ considerations and applications. I cannot give timelines on geological disposal. The noble Earl will understand that the Lincolnshire position is difficult at the moment, and we are not absolutely certain about where we are going with that. Clearly, the long-term future in relation to waste is geological disposal, but interim storage is of the highest quality and can assure safety. It fits into the general position. I cannot comment on the CNC role and security issues. All I will say is that security at our existing sites and new sites is crucial.

I fear I am going over my time, but I must refer to the important contribution by the noble Baroness, Lady Bloomfield. We are totally agreed on the importance of nuclear energy and safety standards. Let me reassure her that our review of the regulatory system will not put safety at risk. I will make just one point about international collaboration. Surely we can do more to share knowledge and information. If in the US, for instance, a technology has been given approval, there must be ways in which we can have reciprocity. I am convinced of that. In relation to the collaboration between regulators, we need to do much more. A comment was made earlier about the roles of Natural England and the Environment Agency. We have to ensure that these regulators work together and in a timely way.

Perhaps I can pass on oil and gas, as we have debated that many times, but nuclear innovation is very important. The Prime Minister’s visit to the UK National Nuclear Laboratory in Springfields only a couple of months ago was a signal of the Prime Minister’s support for nuclear and our innovation.

I am sorry that I have taken so long, but this has been a really interesting debate. The contributions of noble Lords have been very helpful. They will be carefully considered by my officials before advice is given to Ministers.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I apologise to the Committee. I should have started my speech by drawing attention to my registered interests. I still have a small legacy involvement with a Canadian nuclear company.

[Lord Hunt of Kings Heath (Lab)]

I thank the noble Baroness.

Motion agreed.

Nuclear: Small Modular Reactors

Lord Hunt of Kings Heath Excerpts

Monday 19th May 2025 Lords Chamber

[Lord Spellar]

To ask His Majesty’s Government when they expect to make an announcement on the award of contracts for small modular nuclear reactors.

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

My Lords, Great British Nuclear is overseeing the small modular reactor competition for UK deployment. Following a period of detailed negotiation, bidders have now submitted final tenders, which Great British Nuclear is evaluating. Final decisions will be taken shortly.

[Lord Spellar (Lab)]

My Lords, I convey my best wishes to the Minister on his birthday today. Can I just press him a little further and ask him to celebrate by bringing some good news to the energy, nuclear and engineering industries and their workers and consumers by finally announcing or even giving a clearer date as to when a decision will be taken on small modular nuclear reactors? Is this to be yet another great British development lost to overseas suppliers due to bureaucratic inertia, dither and delay?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am most grateful to the noble Lord for his congratulations. What better way to spend my birthday than answering his Question? I understand his frustration. Of course, we want to get this SMR programme over the line. Great British Nuclear is coming to the end of its evaluation process. I expect an announcement to be made within the next few weeks. I believe we have a great opportunity in this country to develop small modular reactors and a UK supply chain and to get us towards net zero, because of the essential contribution that nuclear power will play in the baseload we require.

[Lord Sharma (Con)]

My Lords, I welcome the fact that the Government hope to quadruple the amount of nuclear capacity by 2050—the same target that the Conservative Government had—and it is very welcome in terms of baseload. Can the Minister give us some indication of what percentage of that increase in capacity is going to come from SMRs and AMRs as opposed to big nuclear, particularly given how long it takes for decisions to be enacted?

[Lord Hunt of Kings Heath (Lab)]

My Lords, the noble Lord is referring to the road map issued by the last Government. He will know that unfortunately it was not backed up by any concrete plan or resource, so we are having to pick up the pieces. I cannot yet give him the answer on the mix between SMR and major-gigawatt plants. We are clearly alongside the SMR programme. We are moving rapidly towards final investment decision on Sizewell C, which is 3.2 gigawatts. That follows Hinkley Point C, where EDF says the first unit will open between 2029 and 2031. Over the next few months we will work very hard to look at the potential of SMRs, gigawatts and the advanced modular reactors and give industry a sense of where we are going in order to give it the security and certainty it needs to develop the supply chain we want to see.

[Lord Morse (CB)]

My Lords, I declare an interest as a resident of Suffolk. I mention that because to understand the context of small nuclear reactors, it is worth while understanding the progress being made—or not—on the large nuclear reactors. Is it true that the new Sizewell nuclear reactor is not yet funded and that, while it is throwing concrete around north Suffolk, there is no contractual basis for doing so?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I congratulate the noble Lord on living in Suffolk. Only a few weeks ago I had a meeting with Suffolk local authority leaders to discuss these very matters. He is right in the sense that, as I have already said, we are moving rapidly towards final investment decision on Sizewell C. I very much hope we will be able to get that over the line. We have committed £2.7 billion of funding through the Sizewell C devex subsidy scheme to support the project’s development during the current financial year. It consolidates the Government’s position as the majority shareholder in Sizewell C and is laying the foundations for final investment decision and, we very much hope, a 3.2-gigawatt nuclear power station that will power 6 million homes for 60 to 80 years.

[Earl Russell (LD)]

My Lords, this Government are clearly committed to making progress on SMRs, primarily to help power AI. AI will be a great consumer of power but equally has great opportunities to bring huge energy savings and efficiencies. I welcome the recently launched AI Energy Council, but are the Government doing enough to bring about the required AI energy efficiencies? I ask the Government to publish a full AI energy efficiency strategy for making the best use of AI that sets out clear targets for AI to be better than carbon-neutral before 2030.

[Lord Hunt of Kings Heath (Lab)]

My Lords, we are well aware that both AI and data centres will lead to a major increase in electricity demand. We are also aware of experience in the US, and interest in this country, in linking these AI data centres to nuclear development. The EN-7, the siting policy for nuclear sites, which we are debating in your Lordships’ House on Wednesday, gives us a more flexible siting policy as a result. We are well aware of the potential. We are working very hard to consider how we can encourage this development with private sector funding. I take the noble Earl’s point about the need for us to be very clear about where we are going in this area; I very much accept that.

[Baroness Winterton of Doncaster (Lab)]

My Lords, I thank my noble friend the Minister for the positive discussions he has had with colleagues in the public and private sectors with regard to the manufacture of small modular reactors in South Yorkshire, but I am very aware that it is not just his department but the Treasury. Will he impress upon the Treasury the fact that the Czech and Korean Governments are forging ahead with design and technology of SMRs and that unless we get our skates on about the urgency of this, we will be buying SMRs from overseas and not making them in this country?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I need no encouragement from my noble friend to knock on the doors of the Treasury. That is what we have been doing over the last few weeks, and having, I hope, very constructive discussions. I pay tribute to our former colleague Richard Caborn, the work he is doing in South Yorkshire in relation to the nuclear supply chain and the developments he is encouraging. I had a very good meeting with him and colleagues only a few weeks ago, and we are certainly very much apprised of the need for urgency. I am confident that we have a real opportunity in this country to develop SMRs and to see a strong UK supply chain. We should not be pessimistic. We have a great opportunity here.

[The Earl of Effingham (Con)]

My Lords, please allow me to quote the noble Lord, Lord Howell, former Secretary of State for Energy:

“some of us have been talking to the main SMR producers … delay and obstruction are their findings in dealing with the British Government … the order books are rapidly filling up in all other countries”.—[Official Report, 29/4/25; cols. 1095-96.]

The chief executive of Rolls-Royce has also warned that the Government run the risk that critical supply chains to support the development of SMRs will be built elsewhere if they fail to select the companies to build them by the end of June. Time really is of the essence. Will the Minister also commit to urgently addressing the regulatory, planning and environmental concerns that have caused the cost of nuclear in this country to soar?

[Lord Hunt of Kings Heath (Lab)]

My Lords, we inherited the regulatory and planning infrastructure that the last Government left. Indeed, we have set up a time-limited task force to look at regulation to see how, in the experience of Hinkley Point C, we can find ways, without comprising safety, to speed up the regulatory process. We have the Planning and Infrastructure Bill coming to your Lordships’ House very shortly; I look forward to the support of the Opposition in taking it through.

As for what SMR companies are saying, I have had the opportunity of meeting very many companies that wish to develop SMRs. I have been to a number of international fora. The UK’s position, which, after all, the noble Earl’s party set up—the Great British Nuclear exercise that we are currently going through—is of considerable interest. We are going through a transparent and robust process. I believe that we will have decisions very soon and that they will set this country on a very good pathway on small modular reactors.

[Lord Krebs (CB)]

My Lords—

--- Later in debate ---

[Lord Krebs (CB)]

My Lords, can the Minister give us an assessment of the availability of the relevant skills for building SMRs? If there is going to be a skills shortage, what training programme do the Government intend to put in place?

[Lord Hunt of Kings Heath (Lab)]

My Lords, that is a very important point. We have a national strategic skills task force, and a plan. We reckon that we already need 40,000 extra people in the industry between now and 2030. We will need many more with the SMR programme. We are working very hard with the industry. I believe the kind of jobs it offers—well paid, in a stable and exciting environment—will bring people in, but we stand ready to support industry in that regard.

Infrastructure Planning (Onshore Wind and Solar Generation) Order 2025

Lord Hunt of Kings Heath Excerpts

Tuesday 13th May 2025 Lords Chamber

Moved by

[Lord Hunt of Kings Heath]

That the draft Order laid before the House on 10 March be approved.

Relevant document: 20th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 6 May.

Motion agreed.

Methane (Environment and Climate Change Committee Report)

Lord Hunt of Kings Heath Excerpts

Tuesday 13th May 2025 Grand Committee

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

My Lords, it has been an interesting debate. Like members of the Grand Committee, I am grateful to the noble Baroness, Lady Sheehan, for initiating the debate and her chairmanship of the Environment and Climate Change Committee. The committee’s report on methane emissions has shed light on one of the most pressing challenges we face in the pathway to net zero. I thank all noble Lords who took part in the production of the report, as well as those who participated in this well thought-out and thorough debate.

I go back to the beginning, the noble Baroness’s speech, when she referred to the outcome of the Select Committee report as being a message of hope. I agree. I should also go back to what the noble Lord, Lord Trees, and other noble Lords pointed out about the reduction in methane emissions, which must be counted. While there can never be complacency in this area, this has to be counted as a significant achievement by this country.

I also accept the point from the noble Baroness, Lady Sheehan, that we need to keep up the momentum. As noble Lords have said, the science on this is unequivocal: methane is responsible for almost one-third of global warming since the Industrial Revolution. However, as the noble Baroness explained, it remains in the atmosphere for only a fraction of time—approximately 12 years. Therefore, reducing those emissions is one of the fastest ways that we can avert one of our most acute climate change risks and keep the Paris Agreement in reach, which is a fundamental global challenge that we face.

The independent advice from the Climate Change Committee ahead of our next carbon budget sets a cross-economy pathway to reduce emissions, including measures that contribute to the reduction of methane emissions. We are considering the recently received Climate Change Committee’s report and we are bound to respond by summer 2026.

Let me make this clear. The noble Lord, Lord Jay, asked whether we are absolutely committed to net zero. The answer is yes; we have to be: the science about the impact of climate change is so convincing. We have to stay determined. One of the tragedies of current political discourse is that there have been so many attacks on net zero. The ludicrous idea that the measures being taken on net zero have led to damage to our economy is so nonsensical, because the one thing on which I am clear is that the big issue on energy prices has nothing to do with the policies that have been taken on net zero but everything to do with our vulnerability to the international fossil fuel market.

In February, the CBI produced a report on what I think was described as the green economy. A 10% increase in the green economy in 2023 compares to a very modest increase generally, and nearly 1 million people are employed in the green sector overall. One can make a very convincing argument that investing in net zero, which we have to do, is actually a way to kick-start growth in the economy. We have this mission statement and I have taken part in a number of cross-government discussions over the last few weeks: the Government are absolutely committed. I take the point from the noble Lord, Lord Roborough, that we need a practical approach to making progress, but there cannot be a let-up in the drive to net zero.

This is the context in which we need to consider the recommendation of the committee to which noble Lords have referred and the question of an action plan. It is obvious that the response given in our written report is disappointing, and I am sorry that I am not in a position to overturn that in the light of your Lordships’ contributions. However, we basically believe that this is covered in our existing delivery plan for carbon budgets. The point I make is that carbon budgets are the very engine room of our pathway to net zero. We are absolutely committed to including key methane policies in the carbon budgets plan, covering the period up to 2030, which will contribute to the Global Methane Pledge.

Under the Climate Change Act, legally binding carbon budget targets require domestic reductions across all greenhouse gases, including methane, to keep us on track to meet net zero. As I have said, we are committed to a progress report in relation to the fourth, fifth and sixth carbon budgets, and we have just received the advice from the Climate Change Committee in relation to the seventh carbon budget.

On the EU and UK trading emissions system, at this stage all I can say to the noble Earl, Lord Russell, is that we understand the importance of what he is saying. We are in discussions at the moment, but I am afraid that I cannot go any further at this point.

We had very interesting insights into agriculture. It is the largest source of UK methane emissions, and we were treated to expert interventions from my noble friend Lord Grantchester, the noble Earl, Lord Leicester, and the noble Lord, Lord Roborough, who all made important points. I very much take the point made by the noble Lord, Lord Roborough, about the impact of measures on food prices. This is clearly a tension that Governments have been facing for many years, which also relates to the issue of welfare standards, as well as comparisons between this country and others, and it feeds into discussions on trade. It is a very difficult and challenging issue.

It is right to place on record my gratitude to the National Farmers’ Union for its valuable contribution to the Select Committee. I certainly appreciate the efforts of farmers in this area and find no attraction whatever in a punitive approach. When I was a Minister in Defra—I had a joint ministerial job across Defra and DECC, as it was called in 2008—I took part in discussions with the NFU on reducing emissions in the agricultural sector. I think it is right to say that it gladly took part in those discussions, and that co-operation has continued.

We are committed to introducing a land use framework, which will make environmental land management schemes work for farmers. Defra is also looking at a number of other measures to reduce emissions from livestock, alongside the upcoming food strategy and farming road map. I am afraid that I cannot give a definite date to the noble Baroness, but we think that this will be a credible plan to reduce food and farming emissions by working closely with stakeholders.

The noble Lord, Lord Trees, made a number of comments about accurate reporting, and other noble Lords added to those discussions. There was reference to recommendation 7, in which the Select Committee asked the Government to move unilaterally to an auxiliary metric. It also asks us to play an active role in international discussions as the UN Framework Convention on Climate Change considers the need to review those common metrics by no later than 2028.

There are two points to be made here. It is clearly important that we have international reporting and that there is consistency in that. I take the point that some noble Lords here are critical about some of the standards of that reporting. However, I say to noble Lords—including my noble friend Lord Stansgate—that we will take an active role in UNFCCC discussions on common metrics. The agenda item will be continued in June 2027, and we will continue to be led by the best available science and international consensus. I have taken note of a number of comments made today by noble Lords.

On my noble friend Lord Grantchester’s comments on the dairy demonstrator project, I cannot go further than our response to recommendation 12. However, that project has now commenced, following the signing of the contract, and we will obviously watch its progress with a great deal of interest.

On the comments made by the noble Earl, Lord Leicester, I take his point about the important role that anaerobic digestion has to play in meeting net-zero goals. We think that, with the right standards of controls in place, it presents opportunities for improved nutrition management, nutrient management and a nutrient circular economy. There are, as he knows, challenges in relation to the risk of improper management, which can lead to issues with environmental risk. However, we certainly think that it has a role to play, and I will take note of the noble Earl’s comments.

The noble Lord, Lord Ravensdale, made a number of interesting comments too. I was especially interested in the points he made about regulators. Clearly, in a field where a number of regulators come into play, the key is to make sure that they work together and that there is no overlap or duplicated approaches. We have announced plans to conduct an internal review of regulations and regulators at Defra, which should help the noble Lord in that area.

I can say to the noble Lord, Lord Roborough, on fossil fuels and the role of the North Sea, that clearly this has been a crucially important sector of our economy for many years. We still have many highly skilled people working there, but we lost 70,000 people in the last 10 years under the previous Government. It is called a super-mature basin, and it is declining. Oil and gas have a role to play in the future, but we are right to go for a balance between different technologies. The emphasis we are making on nuclear as a baseload and putting huge effort into renewables, while having gas as a strategic reserve, is the right way to go forward.

On venting and flaring, which noble Lords have raised before both in the Chamber and here, my understanding is that the regulator is already taking action to increase transparency and accountability. In March 2024, the North Sea Transition Authority published its emissions reduction plan, requiring industry to reduce flaring and venting.

I am not sure for how long I am allowed to speak here, but I will just turn to international leadership. Noble Lords have said that the UK is in a great position to exercise international leadership, and I agree with that prospect. It is on a par with the country being the first major colony to establish a net-zero target in law, and I pay tribute to the noble Baroness, Lady May, for her leadership, which her party unfortunately seems to have forgotten in its fast retreat from net zero. I regret that, because the loss of consensus is a serious matter for the country and the future. We saw that at the local elections recently, during which net zero was attacked by some political parties.

It is important that we maintain our leadership. During the COP 26 presidency, as the noble Baroness said, we were one of the first countries to join the Global Methane Pledge. We are stepping up our efforts to deliver on the pledge through funding to support developing countries. We were one of the 30 signatories to the Declaration on Reducing Methane from Organic Waste at COP 29. Now, of course, we are thinking about COP 30 in Brazil, which is only a few months away, and we are working very hard with the COP 30 presidency, as noble Lords have suggested.

From the Government’s point of view, this is a very interesting report. I know that noble Lords are disappointed with one or two of our responses, but the overall response accepts that this is a thoroughly prepared and researched report. As the noble Earl, Lord Leicester, said, the witnesses came from a wide variety of backgrounds. It is clear that the committee had to give a great deal of thought to the recommendations; we should acknowledge that. We accept the core thrust of the report. Although I have disappointed noble Lords again tonight in relation to the action plan, there will be no lack of action by the Government in responding and in making sure that we make progress on methane reductions, but we think that the carbon budget process is the right way to go forward.

In conclusion, I thank noble Lords for what has been a really fascinating and helpful discussion; I can assure noble Lords that it will inform policy development in future.

Energy Prices: Energy-intensive Industries

Lord Hunt of Kings Heath Excerpts

Tuesday 6th May 2025 Lords Chamber

[Lord Offord of Garvel (Con)]

My Lords, the UK has the highest industrial electricity prices in the OECD. We have discussed this many times in your Lordships’ House. Our prices are 45 times more expensive than in the USA and seven times more expensive than in China. Without cheap energy we are deindustrialising through the back door. Just last week, on 1 May, the Times reported that:

“Three in five British companies have said that ‘rising and unstable’ energy costs are undermining growth plans”.


So will the Minister please listen to the advice of industry, and reconsider this accelerated plan to decarbonise the grid at any cost to prevent more British jobs being lost in our flagship energy-intensive industries?

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath)]

My Lords, I of course recognise the challenge that high energy prices pose for UK businesses. I am very well aware that the Urgent Question in the Commons related to a ceramics company in the potteries, Moorcroft. Let me say at once that my thoughts are with all those workers affected, and I know that Ministers are working very hard with the company and the industry to talk through some of those issues.

I say to the noble Lord that the structure we have in relation to energy prices is the same as the one his Government left when they left office last July. We know that the main reason why we have high energy prices is our reliance on international gas and oil markets, which related back to the shock to the system from Putin’s invasion of Ukraine. We believe as a Government that the faster we move to decarbonise, the more we can provide energy security and cheaper energy, and that this is the best way to go forward. If anything came from the previous Question about the advice of the Climate Change Committee, it is that we cannot afford to let go or slow down in relation to climate change. We do not have that luxury; we need to press on.

[Earl Russell (LD)]

My Lords, our industrial energy prices are too high and our transition to net zero must not come at the cost of specific industrial sectors. The Minister has noted that the original Question in the Commons was in relation to our pottery industry. It is clear that the energy supercharger is helping, but what more can be done to make sure that it is helping all our industries? It is also no secret that the Government are looking at energy market reform in our domestic sector, so can the Minister say what action is being taken to help with industry’s energy costs? What thoughts have the Government had about setting up a permanent independent body to advise the Government on the complex matters involved in the energy market reform policy?

[Lord Hunt of Kings Heath (Lab)]

My Lords, the noble Lord is of course right to refer to the energy supercharger: £470 million is being contributed towards helping companies which are major energy users. Obviously, we look at the scheme and at whether any changes should be made, but as regards energy market reforms, we are certainly looking at a number of issues in relation to the electricity market. We are looking at issues to do with zonal pricing and the rebalancing of the cost of electricity and gas. But these decisions are not easy and there will be gainers and losers, so we have to take this very carefully. The ultimate answer to the noble Earl’s question is that we need to decarbonise as quickly as possible. That will give price stability and certainty to industry.

[Lord Harrington of Watford (Non-Afl)]

My Lords, I am chairman of Make UK, which represents 27,000 manufacturing businesses in the UK, which I think by mutual acclaim amount to between 10% and 15% of GDP. Our members are extremely worried because they face a 50% premium—at the absolute minimum—on the price of the electricity they have to pay compared to their competitors in Europe and elsewhere. The question to the Government is that industry prices are unregulated compared to consumer prices, and they are therefore much more open to the vagaries of the market. The Government have the industrial strategy, which, I hope, will be published in the next few weeks. Can the Minister reassure us that high energy prices and the uncompetitive nature that they provide for most of our members trying to export products and therefore grow the economy will be assisted in the industrial strategy?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Lord and thank him for the work he does on behalf of so many important industry companies. He will know that we are in discussion with organisations such as his own and many other business and industry interests. As he said, we hope to publish the industrial strategy within the next few weeks. I cannot give him any guarantees as to what will be in it, but I assure him that I understand the pressures on our industries, and we are considering those very carefully in government.

[Lord Spellar (Lab)]

But, my Lords, the fundamental flaw in the pricing system introduced at the time of privatisation is that the average price of electricity was determined by the marginal price of the last kilowatt, which is normally produced by gas and, as the Minister rightly said, is therefore driven by international gas prices. That is not a law of physics or engineering but a political decision. Should we not be examining that to rebalance the pricing system to the benefit of industry and indeed consumers?

[Lord Hunt of Kings Heath (Lab)]

My Lords, the electricity market operates on the principle of marginal pricing, whereby the wholesale price of electricity is set by the last technology needed to meet overall demand. That is why gas tends to set the price for the market. We are of course looking at this as part of our REMA review that I have referred to. But the faster we decarbonise our energy and move towards clean power, the less gas will have the influence it does in the current system.

[Lord Teverson (LD)]

What lessons has the Minister’s department learned from looking at our competitors, particularly in Europe, which seems to manage this aspect of its energy markets rather better? What lessons have we learned from across the channel?

[Lord Hunt of Kings Heath (Lab)]

My Lords, we have to look at each country, and some subsidise business costs from the Exchequer. There is no easy way through here; one way or another, there are variations in what Governments do, but we have a very tough public financial situation bequeathed by the last Government, in the form of the black hole they left us, so our options are inevitably constrained. We are not complacent; that is why we have this review of our whole energy pricing structure, and we will look at these matters very carefully. I still maintain, and I think the noble Lord would agree, that the best way to energy security and stable prices is to go towards clean power as quickly as we can.

[Baroness Hayman (CB)]

My Lords, the Minister was absolutely clear that these are not easy decisions, and I think we all understand that. But the high price of electricity affects not only industries but consumers, so they are decisions, however difficult, that have to be taken. We have been tremendously damaged by the system that we have at the moment, so can the Minister be a little more specific about when we will have the results of the REMA review and when we can change the current perverse system of pricing?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I hesitate to answer the noble Baroness by saying “in due course”. Clearly, these matters are being discussed very fully in my department, and we want to reach a conclusion as quickly as possible, but I cannot give her a date.

[Lord Howell of Guildford (Con)]

My Lords, if the Minister is correct in his economic theory about gas and electricity prices—frankly, I am not sure that he is—why is the lower price of oil, which is now getting quite low, not bringing down the price of gas as well?

[Lord Hunt of Kings Heath]

My Lords, it is because of marginal pricing, whereby gas is the most predominant, and it tends to set the price. As my noble friend said, this system has operated for many years, but we are looking at it very carefully.

Climate Change: Progress

Lord Hunt of Kings Heath Excerpts

Tuesday 6th May 2025 Lords Chamber

[Lord Krebs]

To ask His Majesty’s Government, following the publication on 30 April of the report by the Climate Change Committee Progress in adapting to climate change: 2025 report to Parliament, what plans they have to increase efforts to adapt the United Kingdom to the effects of climate change.

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

My Lords, the Government are committed to strengthening the nation’s resilience to climate change. We welcome the Climate Change Committee’s latest report and are carefully considering its recommendations. We will respond formally in October, as required by the Climate Change Act. In the meantime, we are working to strengthen our objectives on climate adaptation and to improve the framework that supports departments and communities in managing the impacts of a changing climate.

[Lord Krebs (CB)]

My Lords, I thank the Minister for his Answer. The report from the Climate Change Committee points out that there has been no progress in adaptation to climate change since the previous report. During the eight years that I chaired the adaptation sub-committee, we said exactly the same thing. As Yogi Berra would have said, “It’s déjà vu all over again”. The report also says that the Government have no specific measurable targets or objectives for adapting to climate change. I will ask the Minister about just one area. The report estimates that by 2050, approximately one in four properties in this country could be at risk of flooding if there were no adaptation to climate change. My question is: is this an acceptable level of risk? If not, what level of risk do the Government think is acceptable?

[Lord Hunt of Kings Heath (Lab)]

My Lords, first, on the substantive point that the noble Lord makes about progress, he will know that we are not yet halfway through the national adaptation programme 3. Therefore, the response to the Climate Change Committee, which is due by October, will very much reflect the work in progress in terms of what we need to do to beef up the current plan and implementation and to look forward to the NAP4, which starts in 2028. We are not complacent; we take the committee’s report very seriously, and I pay tribute to the noble Baroness, Lady Brown, and her committee for the work they have done. On the noble Lord’s substantive point on the issue of objectives, I very much accept that that is one of the matters we will be considering over the next few months. Secondly, on flooding, of course the report of the committee and the prediction it has made about the 8 million properties that are at risk of flooding by 2050 is something that no Government could take complacently. He will know that we have already committed £2.65 billion to repair or build flood defences, and of course we will look further into this matter in light of the committee’s report.

[Baroness McIntosh of Pickering (Con)]

Will the Government rule out any new development on functional flood plains, particularly in zone B, which is the most at risk of flooding? If the Minister rules that out, he has a good chance of having more resilient houses in other places. Will the Government undertake not to build on functional flood plains?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am not going to stand at the Dispatch Box and say that we are going to rule this out completely. The noble Baroness will know that flood-plain building is possible in the UK at the moment. It is a heavily regulated process with significant planning requirements. We will obviously continue to look very carefully at these issues and whether the requirements are sufficient, but we do not think that a blanket ban is appropriate.

[Lord Watts (Lab)]

My Lords, how much influence can the British Government have on climate change, when many countries are still pumping out more and more gases that will damage the climate? How do the Government assess what we are doing and what other countries are doing?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I recognise the argument, but if every country that emitted the same emissions as the UK does took action, we would have a critical impact on reducing global greenhouse gas emissions. Obviously, we negotiate within the COP process to encourage multilateral agreement to reduce greenhouse gas emissions, but I think that the real lesson of this report is that it sets out in detail the risk to this country and the world of the climate change that will come unless we act towards achieving net zero and reducing our greenhouse gases. This is a very stark reminder of why we should not detract from our pathway to net zero.

[Earl Russell (LD)]

My Lords, the hottest day, the second wettest winter and the second worst harvest on record have all been in the last three years. Given that this report did not find evidence for scoring a single outcome as “Good” in terms of adaptation delivery, and little evidence of change, can I seek the Minister’s reassurance that the Government have heard the very urgent calls for action without further delay, and that the Minister accepts that this must serve as a turning point in our approaches to adaptation delivery?

[Lord Hunt of Kings Heath (Lab)]

My Lords, the noble Earl is absolutely right. The Committee on Climate Change said:

“There is … unequivocal evidence that climate change is making extreme weather in UK, such as heatwaves, heavy rainfall, and wildfire-conducive conditions, more likely and more extreme”,


and the points he raised are absolutely right. We take this report very seriously. We have been in office 10 months, and we are reflecting on the specific points that the committee has made, area by area. By law, we have to respond by October, and I assure the noble Earl we will take this seriously and give a serious response. As I said earlier, this will lead into the work that we need for the NAP4, starting in 2028.

[Lord Teverson (LD)]

My Lords, the report points out that one area in which we have actually moved backwards is the resilience of our water system, not least the atrocious situation that we still have in terms of water leakage. Is this not an example of Ofwat and the water companies letting us all down yet again? What will the Government do about it?

[Lord Hunt of Kings Heath (Lab)]

The noble Lord is absolutely right to point out issues in relation to water, water leakages and the performance of water companies. He will know that the Government are engaged in considerable discussions about the future of the industry. I have noted that the Committee on Climate Change in its report says:

“Through the reforms to the public water sector, currently being considered by Defra and Ofwat, the next water regulatory settlement … should fund and encourage more ambitious options to get the sector back on track for its demand and leakage reduction targets”.


We will obviously look at that very carefully.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. The impacts of climate change and the need for adaptation are often seen in terms of physical structures and infrastructure, but would the Minister agree with me that there are important effects on health and that it is very central that his department talks to the Department of Health about the effects of, for example, the heatwaves, to which reference has been made, and the effects of changes in our and other countries’ climates that mean that we may see diseases that we do not think of as being relevant to the UK here in the very near future?

[Lord Hunt of Kings Heath (Lab)]

The noble Baroness will be aware that the committee’s report refers to heat-related deaths rising in the UK as a result of what is happening to our climate. Since publication of the national adaptation plan 3 in July 2023, we have taken on board that point. The last Government published the fourth Health Effects of Climate Change (HECC) in the UK report in December 2023, detailing the risks. We have updated the NHS Green Plan Guidance in February 2025, setting out key actions each integrated care system and trust should undertake to strengthen their resilience to climate impacts, and we are very much on the case on this.

[Lord Offord of Garvel (Con)]

My Lords, surely in relation to climate change we must be pragmatic in this area and not dogmatic, so my question to the Minister is simply: why do he and his boss, the Secretary of State for Energy, refuse to listen to their closest advisers? Dr Fatih Birol, head of the IEA, says now that investment in oil and gas is required to support global energy security. Tony Blair says net zero is doomed to failure, and Gary Smith of the GMB says the transition to net zero has

“cut … emissions by decimating working class communities”.

Why does the Minister continue to focus on international gas markets when we have an abundance of domestic, cheap, accessible and clean gas under our feet, both onshore and offshore, that would allow us to be energy independent once again and reindustrialise our working-class heartlands? Surely now is the time for the Minister to go back to his boss and tell him to “Drill, Mili, drill”.

[Lord Hunt of Kings Heath (Lab)]

My Lords, if I may say so, that sounded like a very dogmatic question. The noble Lord would be forgiven for not thinking that, in government, his party passed legislation committing us to net zero in 2050. As for the points he makes in relation to jobs, he will know that, in February, the CBI published a report showing that the big growth in the economy in the last year or two has been in the net-zero green sector and that there are nearly 1 million people now employed in that sector—it is the fastest-growing part of our economy. On the Tony Blair Institute, I am a great admirer of Tony Blair, but I have disagreed with him on one or two issues. The report was a global assessment, and it recommended a particular emphasis on nuclear, carbon capture usage and storage and reform of the planning system; we are doing all of that.