Draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2026

Michael Shanks Excerpts

Monday 29th June 2026 General Committees

[The Minister for Energy (Michael Shanks)]

I beg to move,

That the Committee has considered the draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2026.

It is a pleasure to serve in this Committee under your chairmanship, Ms McVey. The draft regulations were laid before the House on 14 May. Before I outline the provisions to be made by the statutory instrument, I will briefly provide some context.

The Offshore Petroleum Regulator for Environment and Decommissioning, which for the sake of all our time I will now call OPRED, minimises the impact of the offshore oil and gas sector on the environment by controlling air emissions and discharges to sea, and by reducing disturbance over the life cycle of operations, from seismic surveys through to post-decommissioning monitoring. OPRED recoups the eligible costs of its regulatory functions from industry in the offshore oil and gas sector in two ways: first, by using regulations that are covered by these draft fees regulations; and, secondly, by five charging schemes. The charging schemes do not require legislative change and will be amended administratively.

OPRED’s average income from fees is about £7.3 million annually, recovered from about 100 companies. Currently, the fees that OPRED charges are based on rates of £210 an hour for environmental specialists and £114 an hour for non-specialists. Environmental specialists are technical staff who carry out the functions of the Secretary of State, and non-specialists are support staff. OPRED’s fees are determined by multiplying the appropriate hourly rate by the number of hours worked by environmental specialists and non-specialist staff.

The current hourly rates have been in force since July 2025. Having reviewed its cost base, OPRED has concluded that the existing rates needed to be revised to reflect today’s costs for regulatory services. During the review, OPRED also identified that some regulatory costs were not being fully recovered, in particular the cost of statutory advice from nature conservation bodies and certain costs associated with the UK energy portal, which is OPRED’s digital system for delivering regulatory services.

The revised cost base ensures that all eligible costs are met by those who benefit from the services, rather than by the taxpayer. That is consistent with the Treasury’s “Managing Public Money” principles, which require full cost recovery where appropriate. The revised hourly rates were approved by the Treasury in January 2026. The draft fees regulations will amend the charging provisions by increasing the hourly rate for environmental specialists to £256 and for non-specialists to £130—there will be a quiz at the end to make sure that people know the difference between those two sets of numbers.

OPRED formally consulted the offshore industry on the rate change proposals and the cost base revision in February this year. The consultation, which launched on 17 February and closed on 13 March, sought views on the proposed rates and their implementation, and we received five responses. While that is a limited number of responses, the issues raised were broadly consistent. Respondents commented primarily on the scale of the proposed increases, including the cumulative impact over successive financial years, and made comparisons with inflation rates, and they expressed concerns about the transparency of the underlying cost base and the timing of implementation.

OPRED considered the consultation responses and concluded that the new rates accurately reflect the cost of carrying out its regulatory functions, despite being higher than the rate of inflation. OPRED acknowledged that the timing of the rate increase could cause issues for industry in relation to planning and budgeting, but it saw this as part of an anticipated annual process. The new hourly rates are expected to be brought into effect at the beginning of July, in line with rate changes in previous years. OPRED concluded that failure to implement the revised rates would result in costs falling on the taxpayer, rather than on those benefiting from its services. OPRED determined that the rates should be increased in accordance with the proposals in the consultation. A formal response was published in April 2026. OPRED’s fees regime guidance will be revised to reflect the new hourly rates.

I conclude by emphasising that the revisions to the hourly rates introduced by the draft regulations will allow OPRED to recover the eligible costs of providing regulatory services from those who benefit from them, rather than those costs falling on the taxpayer. I hope that all hon. Members will support the measure.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

It is an absolute pleasure to serve under your chairmanship this evening, Ms McVey. As the Minister has eloquently set out, the draft regulations seek to increase the fees associated with a number of assessment requirements for the licensing of offshore activity, such as conservation of habitats assessments and offshore safety directives, and they are eminently sensible.

[Michael Shanks]

Hear, hear!

[Andrew Bowie]

There is a first time for everything. I do not seek to stand in the way of these regulations, but I will raise the inherent irony illustrated here of a Government who have made clear their intention not to issue new licences for exploration yet are seeking to increase the costs associated with environmental impact assessments and other regulatory requirements. I hope it indicates the beginning of a change of course for the Government, but I fear that will not be the case. We can but hope.

This Government have decided time and again to move against our domestic energy industry, choosing to run down our North sea ecosystem rather than nurture the skills base and support the industry. Two weeks ago, the Aberdeen South by-election—a referendum on our oil and gas industry that I will not stop talking about—saw the north-east of Scotland return a decisive verdict. Will the Government listen?

[Michael Shanks]

The shadow Minister and I have this bout regularly, and he makes the same points as he always does. I congratulate him on the one by-election that his party has won, but I am afraid that I do not have time to name all the by-elections it has lost in recent years. However, I am absolutely delighted to find a bit of consensus between our two parties, and I welcome his support for the regulations.

On the wider point, as I have said repeatedly, our domestic oil and gas industry is hugely important and will continue to be so for many years to come, but so too is investing in the future of our energy industry beyond oil and gas. I hope that the same consensus we saw at the start of the shadow Minister’s speech might yet be found on our wider investment in the North sea, which benefits his constituents and indeed those of the new hon. Member for Aberdeen South (Douglas Lumsden).

Question put and agreed to.

Nuclear Decommissioning Authority: Hinkley Point B

Michael Shanks Excerpts

Thursday 25th June 2026 Written Statements

[The Minister for Energy (Michael Shanks)]

My hon. Friend Lord Vallance of Balham, Minister of State for Science, Research and Innovation, has today made the following statement:

I am today laying a designation direction, which has been given to the Nuclear Decommissioning Authority in respect of the Hinkley Point B nuclear site. The direction reaffirms NDA’s responsibility for the cleaning up and decommissioning of the site, triggering their powers under the Energy Act 2004. The direction has been given with the consent of EDF Energy Nuclear Generation Limited and Nuclear Restoration Services, in accordance with sections 3 and 5 of the Energy Act 2004.

This is a significant moment for nuclear decommissioning as the direction marks the second nuclear site of the advanced gas-cooled reactor fleet that will transfer to Government for decommissioning.

[HCWS149]

Nuclear Decommissioning Authority: Contingent Liability Notification

Michael Shanks Excerpts

Wednesday 24th June 2026 Written Statements

[The Minister for Energy (Michael Shanks)]

My hon. Friend Lord Vallance of Balham, Minister of State for Science, Research and Innovation has today made the following statement:

I wish to inform the House that the Department for Energy Security and Net Zero intends to undertake a contingent liability to provide the Nuclear Decommissioning Authority with an indemnity to cover risks arising from losses and damages to construction projects across NDA sites. The indemnity is expected to save the NDA at least £1 million per year compared to insurance premiums and will provide certainty of cover.

It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the minute, except in cases of special urgency in line with “Managing Public Money”.

The indemnity covers construction projects on NDA sites against damage from terrorism, fire, flood or other natural hazards. The probability of crystallisation is low and mitigated by robust risk assessments, site access restrictions, rigid safety controls and regulations. It will cover only non-Nuclear Installation Act 1965 risks, as those are covered under the nuclear indemnity.

Construction insurance is an industry norm and the NDA has previously procured this at considerable cost. The indemnity will provide joint protection to all procured construction contractors and the NDA, but the NDA is the only one being indemnified.

The indemnity will be enduring from 1 October 2026, covering claims over £20 million up to a £650 million cap per year and with a £650 million cap per claim. Insurance will cover all claims up to £20 million. If the liability is called, provision for any payment will be sought through the normal supply procedure.

A departmental minute has today been laid before Parliament setting out full details of this contingent liability. The Treasury has approved this liability in principle. My Department will keep Parliament informed of any changes to this contingent liability as appropriate.

[HCWS143]

North Sea Oil and Gas

Michael Shanks Excerpts

Wednesday 24th June 2026 Westminster Hall

[The Minister for Energy (Michael Shanks)]

It is a pleasure to serve in this debate, Ms Furniss. I thank the hon. Member for Bromsgrove (Bradley Thomas); at least I know his constituency, even if the shadow Minister does not—so much for being an hon. Friend. I also thank those who have contributed to the debate; the shadow Minister reeled off all the constituencies, so I do not have to, and I am eternally grateful to him.

I warmly welcome the hon. Member for Aberdeen South (Douglas Lumsden). I was also a by-election MP and know what it feels like to arrive in this place without a cohort of 100 other new people. I wish him the best of luck finding his way around this building. I got on hugely well with his predecessor and appreciated his contributions—at the risk of misleading the House, I must say for the benefit of Hansard that that was sarcasm, but I welcome the hon. Member none the less. I also welcome the hon. Member for Strangford (Jim Shannon), who is ever charming and kind to us all. We could all do with a daily affirmation from him in our debates. I certainly appreciate it.

This debate has been helpful for a number of reasons. The shadow Minister and I know each other’s arguments well enough by now, so there was nothing hugely illuminating in his speech, and I suspect there will not be for him in what I have to say. It was illuminating to hear from Scottish National party that it now has an energy strategy, but it is being kept secret. I hope we will see that strategy published soon, because for three years we have not known the SNP’s policy on oil and gas and a whole range of other things.

That matters for the industry that the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) says—and I believe him—that he cares about. It will help the industry to have clarity on the SNP’s policies. On devolving energy policy, many of the things he calls for, including further investment in renewables, have been driven by the strength of being part of the United Kingdom, of pooling and sharing investment in those hugely successful projects in Scotland, which I suspect would not be possible—[Interruption.] He is about to intervene to tell me how it would be possible, if they were devolved, to fund all those renewable projects and a whole series of other things, and how the electricity market would work in an independent Scotland. I am sure he will briefly explain that to us.

[Graham Leadbitter]

That is not the reason for my intervention. If there is such a drive to get investment and renewables in Scotland—there is some, though it is not nearly fast enough—why did it take two years to make a decision about Ardersier? After two years, the rug was pulled from underneath that with a simple no. If that was the decision the Government were going to come to, surely it could have been made sooner, and the project could have moved on and had some investment. That has the potential for 1,500 jobs on site and a further 4,500 in the supply chain.

[Michael Shanks]

I have made my position very clear on that project. We were carrying out national security assessments, which should always rightly take priority. The First Minister of Scotland has been briefed on the security grounds for doing that. He is aware of why we reached the decision that we reached. I am obviously not going to comment further on that. Our national security always comes first.

Something that I have always said in this role is that our domestic production in the UK does matter. It sustains jobs and it delivers tax receipts and the gas that flows into our pipes every single day. We are not a Government that are for turning off the taps, and we never have been. But we are for recognising that a transition is under way and that investing in what comes next is critical. I am afraid that that is at the heart of the problem with the argument put forward by the Opposition, because they say that we need to build up the jobs that come next, but then oppose all the decisions that drive forward that investment. They criticise that there are not enough jobs coming from renewables but then say that we should not invest in the renewables projects that create those jobs. That is not a coherent argument to have.

[Luke Myer (Middlesbrough South and East Cleveland) (Lab)]

The Minister knows that I am a fierce champion for the new clean power jobs that we are getting on Teesside. We are seeing some of those opportunities scaling up now, but we cannot see mass unemployment in the offshore industry while those opportunities are still nascent. What assurance can the Minister give that every worker will have the opportunity for a genuinely just transition?

[Michael Shanks]

My hon. Friend is right on that point, and I will come to it in a moment because it is the main thrust of my speech.

I will start with what my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton) said and also welcome Donald MacKinnon into his place. I know he will be a strong advocate for the western isles. My hon. Friend rightly recognised that this is about a sense of identity. Yes, it is about a job and a pay packet at the end of the month, but it is also about a sense of belonging to an industry that many people have worked on in incredibly difficult circumstances for a long time.

Since I came into this job as Energy Minister two years ago, and as a Scottish MP and someone who has friends and family working offshore right now, I have always said that getting the transition right for those workers is central. We have seen too many failed economic transitions in the past, so we have to learn the lessons from that. As hon. Members have made very clear today, we must also see the huge potential that comes from the projects that we need in the future, not least in the supply chain that will build many of the projects that we need as part of our transition to clean energy. That will come from those very workers, so it is hugely important that we put them at the centre of all of this.

We also have to recognise that this did not somehow just start happening in July 2024. We have been in a period of transition for decades now. A third of jobs in the industry have been lost in the past 10 years, and we cannot accept that failed status quo any more. Burying our heads in the sand and ignoring the realities of the need for us to fund this transition properly will not protect a single job, nor will it create a new one. Nor will abandoning the sector entirely and turning off the taps as others would seek to do. I notice that this is yet another energy debate where no Green MPs—who have the most extreme positions on this issue—have bothered to turn up.

It must never become a binary conversation. The North Sea Future Board, which I chair, has just produced a statement on what we are seeking to do to drive forward this transition. That says that, at the heart of it, that transition is not about one industry being pitted against another. It is about stewarding the future of the North sea through collaboration and through managing all the opportunities that come, as well as an obligation to work together. There is always rightly a lot of heat in these debates, but I honestly believe that underneath it all there is a lot more consensus about the need, not for one or the other, but for all the energy that we can get and for all the jobs that come from it.

I will briefly say what our position is on the North sea. Gas has been flowing into this country for more than 60 years and is continuing to flow into this country 24/7. I was pleased to be at Bacton gas terminal a few weeks ago to see the skilled work that they do to manage up to a third of this country’s gas. It will continue to be a vital resource for decades to come, but it is also a basin that has been in decline. The most accessible oil and gas has been extracted. Production has been in decline for a quarter of a century, and it reduced by approximately 75% between 1999 and 2024. That did not begin in July 2024.

[Harriet Cross]

On that basis, why do the Government feel it necessary to ban new licences? The Minister says that production is declining, so why do they need to ban them?

[Michael Shanks]

Because we want to steward the future of the basin and have a strategic plan that industry can get behind. Very few of the licences that have been issued in the past few years have come to production, so they are not the route to that, but the process had so far not had clarity from the Government. That is why we said what we said on licences.

The second part of our manifesto commitment, which is often ignored in this conversation, is that we will continue to manage existing fields over their lifetime. We are not rescinding any licences—we are not saying that new production could not come forward in existing licensed fields—or rescinding any projects that currently exist.

My hon. Friend the Member for Na h-Eileanan an Iar made a point about the importance of tiebacks. This is the pragmatic approach that industry has called for, recognising that the most economically viable route to sustaining the fields is to have a tieback to an existing field that produces new oil and gas. That maintains the critical infrastructure and supply chains, as well as prolonging jobs. That is what industry called for, and that is the pragmatic approach we took in the North sea future plan.

[Mr Carmichael]

How confident is the Minister that he can maintain the infrastructure in the North sea and to the west of Shetland, so that oil and gas can be brought onshore, as well as through floating production storage and offloading units, without new licences?

[Michael Shanks]

The right hon. Gentleman raises an important point about what the stewardship of the basin has to look like, and he made another important point earlier about not conflating oil and gas. Equally, the story we tell about the North sea is often what the North sea looked like 30 or 40 years ago. It has changed significantly; the operators in the basin have changed, but so too has the structure of many of the operations. The North Sea Transition Authority has a role in planning the future of the basin and identifying issues relating to sustainability and infrastructure. It also has a role in looking at how we can do more around, for example, the electrification of platforms, so that we can reduce emissions from the platforms wherever possible and tie into offshore wind projects where possible.

Let me turn to the critical issue of the workforce. Under the North sea future plan, we will introduce a statutory objective for the North Sea Transition Authority to consider workers, communities and supply chains in its decisions. The NSTA has been looking at how it can support the transition for a long time, but this gives it a statutory objective to do so. This is not just about production and infrastructure. It is about people and places; it is about the workers who built the North sea success story, and with it the success of the British economy, the communities that supported it and, crucially, the supply chains that go with it.

We will also extend employment rights and protections to offshore renewables workers, and I hope that everyone in this House will support that. Coming to the point made by my hon. Friend the Member for Mansfield (Steve Yemm), we recognise that the clean energy workforce of the future has to have strong and fair protections, be trade unionised and have good, well-paid jobs. That is partly why, for offshore wind, we have driven forward the fair work charter as part of the clean industry bonus, so that rights are at the heart of these jobs and that, wherever possible, workers can transition from oil and gas into these jobs with good terms and conditions. That was opposed by some Conservative Members when we took it through Parliament recently, but I hope that they will rethink, because it is hugely important.

The hon. Member for Bromsgrove made a point about energy security, which is absolutely right. Our energy security is our national security. It is perhaps more important now than in recent years that we recognise that, in an uncertain world, our energy security is a hugely important part of how we build much more security at home. The point made about refinery capacity was right. We lost two refineries in this country, and I regret hugely that we did not do more to prevent those closures in the years leading up to them. We have now to protect our four refineries, which are hugely important sovereign capacity. In a global fuel crisis, those refineries have been key to ensuring that Britain has not suffered fuel shortages. We have to continue to support them.

On the point made by my hon. Friend the Member for Alloa and Grangemouth (Brian Leishman), we committed to invest £200 million in the future of Grangemouth, and other projects are coming through. I gently say to him that we had to pick it up with no planning done in advance, and I am afraid it is not possible for us to get projects off the shelf, invest money in them and get them built immediately. We need business and industry to come forward with propositions, and the Government have an open door to engage with them directly on how we can deploy that money to Grangemouth. I meet them regularly to make sure that is happening, and we will continue to do that.

Again, I thank the hon. Members who have participated. It is hugely important that we talk about these issues. I hope we can also find a way, at some point, of reaching some consensus on how we can have an all-energy approach to the future of the North sea. I recognise that needs a pragmatic position on our side, but it also needs a pragmatic position from those who, in recent years, seem to have become anti the very investment that will drive forward the future of the North sea.

It is not possible for us to secure the long-term future of the North sea purely by calling for new licences in oil and gas. Anyone who believes that is the long-term answer is ignoring the reality in front of us. Oil and gas is hugely important, but the transition works only if we also invest and build up what comes next. We need both of them. A fair, managed and prosperous transition means investing in all of that—in offshore wind, carbon capture, long-duration energy storage in Scotland and elsewhere, and in supply chains so that we are building energy in Britain again, not towing it in from somewhere else and offshoring the jobs. That is the opportunity in front of us.

None of this will be easy. We will have to wrestle with some real challenges, but if we move fast to invest in the future and take a pragmatic position, I believe the North sea has a strong future ahead of it. I do not pretend that it is straightforward or that that will somehow give comfort to the workers who are facing it just now, but I am absolutely committed to making this work, and so are the Government. I thank the hon. Member for Bromsgrove for securing the debate, and I thank everyone who participated.

Draft Contracts for Difference (Allocation) (Amendment) Regulations 2026

Michael Shanks Excerpts

Tuesday 9th June 2026 General Committees

[The Minister for Energy (Michael Shanks)]

I beg to move,

That the Committee has considered the draft Contracts for Difference (Allocation) (Amendment) Regulations 2026.

The draft regulations were laid before the House on 20 April. They make several minor and technical amendments to improve the operational efficiency of the contracts for difference scheme during the assessment of applications. Subject to the will of Parliament, the Government intend to introduce those targeted and practical measures in time for allocation round 8, which opens on 20 July.

For the interest of Committee members, the CfD scheme is the Government’s flagship policy for supporting new low-carbon electricity generation in Great Britain. CfDs are awarded through annual competitive auctions, with the lowest-priced bids being successful. In March, in response to events in the middle east, my right hon. Friend the Energy Secretary outlined a package of measures to go further and faster on clean power, including bringing forward the opening of AR8 to July to provide certainty for clean energy investors.

The most recent allocation round, AR7, alone secured 14.7 GW of clean, home-grown generating capacity across 201 new projects. AR7 built on the success of AR6—out in September 2024—which secured more than 7 GW of renewable capacity across Great Britain. AR7 was the most successful renewables auction in European history. The reforms we introduced for AR7 boosted competition and investor confidence, and secured renewable capacity at strike prices 40% lower than the cost of building and operating a new gas power plant. Such achievements show how the CfD scheme—our key path to deliver on our mission of clean power by 2030—strengthens Britain’s energy security.

The regulations that govern the scheme are kept under review to ensure that they remain fit for purpose. The draft regulations will make the following three targeted amendments to improve the future operation of the scheme. First, they will enable the National Energy System Operator to correct certain types of error it makes during the assessment of applications by issuing new or amended qualification decisions, where evidence supports that. NESO, in its role as the CfD delivery body, assesses applications against the eligibility criteria and determines whether applicants qualify to participate in the competitive allocation process. As the CfD scheme has grown in popularity, the volume of applications has increased significantly, with several hundred submitted in recent allocation rounds. Eligibility checks are always robust, but larger numbers of applications increase the risk of errors in assessment decisions. This amendment will ensure greater consistency and fairness in how the eligibility requirements are applied.

Secondly, the draft regulations will enable NESO to consider additional information or documentary evidence submitted by applicants when examining appeals from non-qualification decisions. That change will help to avoid projects being disqualified for minor or trivial omissions from their applications. It should streamline the process and ultimately increase the number of participants in the auction, which will help us by driving greater competition and better value for money for bill payers.

Thirdly, the regulations clarify how NESO is to treat applications where eligibility has not yet been decided by the point at which the regulations require NESO to proceed with the auction. In the light of operational experience from AR7, this amendment will remove some ambiguity in existing regulations.

Finally, the draft regulations provide for procedures or information relating to the implementation of several of the measures that I have just described to be set out in the contract allocation framework—a statutory document that contains the eligibility criteria and rules governing how NESO must allocate CfDs in an allocation round. The Government published a draft of the framework setting out the proposed requirements for AR8 on 1 June, and invited stakeholder views. The final version will be published in early July, before the round opens to applications.

These amendments received strong stakeholder support in a recent public consultation, which showed broad recognition that the changes will improve the experience of applicants during the assessment process, support more effective competition and secure better value for money for consumers. This approach reflects our continued close engagement with industry in the development of the CfD scheme. By building on the foundations that we laid in AR7, the draft regulations will strengthen the procedures and simplify the operation of the scheme, which will drive progress towards clean power by 2030, while of course helping us in our No. 1 mission of securing value for money for bill payers. I commend the draft regulations to the Committee.

--- Later in debate ---

[Michael Shanks]

I welcome the comments of both hon. Gentlemen, in particular those of the hon. Member for West Dorset, who spoke to the actual draft regulations. I thank him for his support. I also thank the official Opposition for their support for all that we do in energy policy, or so it seemed from the speech of the shadow Minister, the hon. Member for Mid Buckinghamshire.

The hon. Member for West Dorset spoke about increasing the CfD lifetime, but we did extend the CfD from 15 to 20 years. We recognised the impact on the cost of investment, which brought down—or played a part in bringing down—some of the bid prices into the auction. We will maintain those changes into AR8 before we open the round.

On the more general points that were made, I think that there is a moment here to reflect. AR7 was the most successful renewables auction that we have ever had. Crucially, however, it was an auction that brought in prices 40% lower than those for building and operating new gas. That was before the situation in the middle east arose. I do not have the actual figure for what the difference would be now, but we can all safely assume that with the price of gas where it is today, it would be a significantly higher saving now than it was then.

That is the truth of the hon. Member for Mid Buckinghamshire saying that he opposes forcing families to pay more; what he is proposing is to force families to pay for gas, which is significantly higher in price right now, and is often much higher. He is gambling that at some point in the future gas prices might come down, so everything will be okay. We are determined not to drive forward our energy system in that way. From an energy security point of view, there has never been a clearer argument than what we are facing right now. Only four years ago, we faced exactly the same question with Russia’s invasion of Ukraine. We have to learn the right lessons, not continue to make the same mistakes.

The last point that I would make—with your patience, Mr Stringer, because none of this is in the draft regulations—is on curtailment and storage. The hon. Gentleman is right to highlight the cost of building the grid, but as much as I would love to take credit for this Government for building the renewables projects that are generating clean power in this country, the truth is that most of them were built under the previous Conservative Government. I give the Conservatives credit for that, even if they do not wish to give it to themselves. What they did not do, however, was build the grid to connect those projects up. We were left with generation right across the country and a grid that was completely out of phase.

A lesson for us to learn from the 14 years of Conservative Government is to build the grid to connect the clean power to households, to connect the economic growth opportunities that we need badly, and to get us off the fossil fuel rollercoaster as fast as possible, so that we are not forcing families to pay sky-high prices for gas, which we can never control. That is what the draft regulations help us to achieve, and I commend them to the Committee.

Question put and agreed to.

Fusion Energy Generation

Michael Shanks Excerpts

Monday 8th June 2026 Written Statements

[The Minister for Energy (Michael Shanks)]

My hon. Friend Lord Vallance of Balham, Minister of State for Science, Research and Innovation has today made the following statement:

The Department for Energy Security and Net Zero is today publishing a draft national policy statement—NPS—for fusion energy generation (EN-8).

Fusion energy has the potential to play a key role in the UK future energy system, supporting long-term energy security, delivering an abundant source of zero-carbon energy and with the potential to export the technology globally. In the shorter term, it is helping to drive growth across the country, delivering high-skilled jobs, inward investment and supply chain development. As fusion technologies continue to advance and private investment accelerates globally, a clear and proportionate planning framework is essential to ensure the UK remains competitive and able to capitalise on the long-term economic opportunities that fusion energy presents.

Today a draft national policy statement for fusion energy infrastructure, EN-8, was laid before Parliament. This delivers on the Government’s commitments within both the UK’s modern industrial strategy and the UK fusion strategy to develop a fusion-specific NPS and publish a draft by summer 2026. Publishing this draft marks an important milestone in creating the conditions for fusion to move from research to commercial deployment in the UK. It will help to ensure that the planning system in England and Wales is ready to support future fusion energy projects. This will support the growth of the UK fusion industry, enable innovation and skills, and reinforce the UK’s position as a leading destination for fusion investment.

The draft EN-8 does not identify specific sites for fusion energy infrastructure and is technology-agnostic (it will apply to the different types of fusion energy technology, e.g. magnetic and inertial confinement), ensuring flexibility for developers and responsiveness to innovation in fusion design. This is consistent with the Government’s July 2025 response to a consultation on a new NPS for fusion energy. That Government response also set out 19 fusion-specific considerations, grouped into environmental, safety & security, operational and developmental themes. Draft EN-8 provides the detailed requirements for developers and the Planning Inspectorate in these areas, in addition to those that already exist in the overarching national policy statement for energy (EN-1). EN-8 has a scope different from EN-7, which is the national policy statement for nuclear (fission) energy generation.

Today marks the start of the formal parliamentary process to designate EN-8 and bring it into force under the Planning Act 2008. From today until 30 November, Parliament will have the opportunity to scrutinise the draft, raise questions and make recommendations. A public consultation on EN-8 will run alongside this stage of the parliamentary process, and officials will provide a summary of consultation responses to the relevant parliamentary Committees once all responses have been received.

Following consultation, EN-8 will be laid in Parliament in its final form for approval by resolution by the House of Commons, or by deemed consent by the House of Commons following a 21-sitting-day consideration period.

[HCWS92]

Capacity Market Consultation Responses

Michael Shanks Excerpts

Thursday 14th May 2026 Written Statements

[The Minister for Energy (Michael Shanks)]

I have tabled this statement to inform Members of the publication of four documents relating to the capacity market. They include:

The capacity market autumn consultation response;

The capacity market winter consultation response;

A summary of responses to the capacity market call for evidence on hydrogen-to-power and interconnectors; and

Updated technical adjustment methodology for de-rating interconnectors in the Capacity Market

The above documents support our objectives of delivering clean power by 2030 and accelerating progress towards net zero, while ensuring security of supply.

Since its introduction in 2014, the capacity market has acted to secure sufficient capacity to ensure consistent and reliable electricity generation in Great Britain. The funding provided through the capacity market incentivises investment in new and existing generation, interconnectors, batteries and consumer-led flexibility mechanisms to ensure that sufficient capacity is available to meet future demand when required. This capacity is acquired through competitive annual auctions held at intervals four years ahead and one year ahead of their respective delivery years. The Government regularly amend the framework underpinning the capacity market before auction cycles to ensure that it is cost-effective and meets broader strategic objectives such as clean power by 2030.

Following two consultations—the autumn consultation, published in October 2025; and the winter consultation, published in December 2025—and a call for evidence on hydrogen-to-power and interconnectors, the Government intend to publish Government responses to the consultations, a summary of responses to the call for evidence and an updated technical adjustment methodology for de-rating interconnectors.

The consultation responses that we are publishing today include reforms to the capacity market rules that aim to secure capacity adequacy to meet the reliability standard through at least the 2030s while keeping the impact on consumer bills as low as possible. These are consistent with achieving capacity adequacy objectives, strengthening delivery assurance, stimulating investor confidence in low-carbon technologies, and strengthening CM legislation to ensure effective scheme delivery.

Capacity Market Autumn Consultation Response

Multiple Price Capacity Market (MPCM)

Having carefully considered the evidence and feedback received, the Government have decided not to proceed with introducing the MPCM and any related policy changes at this time. We will take more time to consider the concerns highlighted by stakeholders and will continue working with industry to address barriers facing dispatchable enduring technologies, while ensuring that the capacity market remains fit for a changing energy system.

Ensuring efficient bidding in capacity market auctions

The Government will raise the excess capacity rounding threshold from 1 GW to 3 GW and limit preauction information to a single rounded excess capacity figure to reduce opportunities for strategic bidding.

Consumer-led flexibility

The Government will streamline reporting for small demand-side response (DSR) components—below 30 kW —and introduce new DSR technology and customer type categorisation to support improved oversight and future methodology development.

Self-nomination of connection capacity for battery storage technologies

The Government will allow battery energy storage system capacity market units to self-nominate their connection capacity from pre-qualification 2026, with full capacity and energy data reporting required and a 50% minimum floor applied. This change reduces the risk of battery storage assets failing performance tests due to degradation.

Determining appropriate means for non fossil fuel generation to access low-carbon CM mechanisms

The Government will allow biomass generators that meet emissions limits and strengthened sustainability criteria to access low-carbon CM mechanisms. The Government will align CM rules to meet the common biomass sustainability framework when introduced. Energy from waste is not to be treated as low carbon under the CM.

Further improvements to capacity market administration and delivery assurance

The Government will introduce termination fees for where a capacity agreement is terminated for making false declarations in an application, confirm the suspension of payments immediately for insolvency termination events, clarify definitions, update the indicative auction timetable, update settlement rules so that they can align with market-wide half-hourly reforms when introduced, and allow pre-qualification extensions in the event of severe failure of the prequalification IT system.

Capacity Market Winter Consultation Response

Managing the transition of existing generating capacity market units into alternative schemes

The Government will amend regulations and CM rules to allow contracts for difference awarded because of a direction from the Secretary of State to pre-qualify for the CM, so long as there are no overlaps in the periods where the generating unit would be supported by both schemes and where this has been evidenced in the pre-qualification application.

Long-duration electricity storage cap and floor (LDES C&F)

The Government will introduce CM rules to provide clarity on how LDES projects participate in CM auctions. LDES C&F projects will assume price taker status as a default. An option to provide a price maker memorandum will remain. A director’s declaration will be required to confirm a project’s LDES C&F status to enable CM eligibility and enforcement.

Standardisation of termination fees and credit cover

The Government will implement a 30% increase in all termination fee rates and require credit cover to be held until a generating unit becomes eligible for payments with escalations at milestones, applying only to agreements awarded from 2027 onwards.

Clarifying rules around secondary trading

The Government will implement amendments to the CM rules to clarify eligibility for secondary trading entrant applications.

Summary of responses to the recent capacity market call for evidence on hydrogen-to-power and interconnectors

Most respondents supported enabling H2P participation using existing gas technology classes, although some noted potential unintended consequences—for example, hydrogen infrastructure reliability, supply chain constraints and impacts on carbon emissions.

Many stakeholders highlighted risks and operational uncertainties—including hydrogen availability, infrastructure readiness and blending impacts—emphasising the need for clear classifications, guidance and policy certainty.

For interconnectors, there was strong support for updating the technical adjustment methodology to the one proposed in the call for evidence, noting that the current method risked becoming outdated.

On the consideration of high-impact, low-probability events in this methodology, most respondents favoured including all outage events to better reflect system risks and maintain consistency with other CM technologies.

As a result of the CfE, Government will:

Adopt the updated technical adjustment methodology from summer 2026, include all outage events in this methodology, and publish a briefing note to detail the final methodology before CM pre-qualification 2026 to provide further transparency over the process.

As the capacity market remains Great Britain’s main mechanism for ensuring capacity adequacy, these publications consider actions to ensure that the scheme continues to meet its primary objective of ensuring security of supply. The proposals put forward seek to ensure that the scheme remains fit for purpose and continues to play a crucial role in achieving the clean power mission.

[HCWS1561]

Nuclear Decommissioning Authority and Nuclear Transport Solutions Project

Michael Shanks Excerpts

Thursday 14th May 2026 Written Statements

[The Minister for Energy (Michael Shanks)]

My noble Friend Lord Vallance, Minister for Science, Innovation, Research and Nuclear, has today made the following statement:

I have laid before Parliament a departmental minute describing the contingent liability that allowed the Nuclear Decommissioning Authority and Nuclear Transport Solutions to carry out a project to remove and transport a quantity of legacy civil nuclear material to the US from Venezuela.

It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances.

Given the sensitivities associated with the project, the Department for Energy Security and Net Zero informed the chairs of the Public Accounts Committee and the Energy Security and Net Zero Committee in confidence of the Department’s intention to take on an indemnity to allow the Nuclear Decommissioning Authority and Nuclear Transport Solutions to deliver the project.

The indemnity was required to cover any residual risk that was left between commercial insurance and the United States of America’s Price-Anderson Act. The maximum potential liability was capped at £10 billion. The risk of this indemnity being relied upon was deemed to be very low. NTS operate a unique maritime transport capability and have done for half a century. They have had no significant safety incidents over that time.

The UK had received requests for assistance from both the United States and the International Atomic Energy Agency which had in turn received a request for assistance from the de facto authorities in Venezuela. The UK’s main contribution was the provision of a purpose-built vessel from Nuclear Transport Solutions to transport the material by sea. The arrival of the material in the US represents the conclusion of the UK assistance to this project.

The Treasury approved this proposal for the contingent liability in principle.

[HCWS1557]

Energy Markets: Middle East Conflict

Michael Shanks Excerpts

Wednesday 29th April 2026 Written Statements

[The Minister for Energy (Michael Shanks)]

The Government are working tirelessly with international partners to find a permanent solution to the current middle east conflict, and are playing a leading role in the international effort to support the free flow of shipping through the strait of Hormuz. While this work continues, traffic through the strait remains severely restricted, and the impact of recent events will be felt across global markets for some time to come.

Over the last two months, the Secretary of State for Energy Security and Net Zero, my right hon. Friend the Member for Doncaster North (Ed Miliband), and I have been in frequent contact with international partners, and the UK has acted alongside them to minimise disruption to energy markets, including contributing 14 million barrels of oil to the largest International Energy Agency stock release in history. I have engaged counterparts in Europe, including during a visit to Spain last week, and have just returned from Ukraine, whose energy sector the UK continues to support in the context of both ongoing Russian attacks and the wider international situation.

Alongside this international engagement, we are increasing domestic preparations to monitor and mitigate the potential knock-on impacts on families and businesses in the UK. The Prime Minister chaired a middle east response committee meeting yesterday to drive this work forward.

On energy bills, thanks to decisions we took in the Budget, the energy price cap fell by £117 a year at the start of this month, with savings locked in until the end of June. We also extended the £150 warm homes discount to around 6 million low-income households. At the start of this crisis, the Government took immediate action, announcing over £50 million of support for vulnerable heating oil customers particularly exposed to rising prices.

In line with the Government’s industrial strategy, the Chancellor also announced an expansion of the British industrial competitiveness scheme, cutting bills for thousands of energy-intensive businesses. We will continue to monitor impacts on bills and stand up for families and businesses.

On petrol and diesel, we are engaging closely with industry to help keep costs down for drivers. The 5p fuel duty cut has been extended until September and the Competition and Markets Authority has put industry on notice that it is monitoring prices closely. Our fuel finder tool supports transparency by helping drivers identify the cheapest fuel locally, with over 90% of petrol stations registered. The CMA will prioritise enforcement action against retailers identified by the data aggregator who are not signing up or reporting prices as they should. In terms of supply, the AA and Fuels Industry UK are clear that production and imports are continuing as usual. The UKproduces more petrol than it uses, making it a net exporter. Supplies remain resilient, and stations continue to be well stocked.

Since the closure of the strait, we have been closely monitoring UK jet fuel stocks and working with airlines, airports, fuel suppliers and international counterparts. UK airlines typically buy fuel months in advance, and aviation fuel suppliers hold bunkered stocks. The UK imports jet fuel supplies from a range of countries not reliant on the strait, including the United States. Airlines UK has stated that UK airlines continue to operate normally and are not experiencing issues with jet fuel supply. The Government continue to work with partners to monitor and mitigate potential disruptions.

The Government continue to plan for a range of contingencies to increase flexibility on jet fuel supply. We have asked UK refineries to maximise jet fuel supply. Airport Co-ordination Ltd has updated its guidance to allow airlines to apply for slot alleviation, providing greater flexibility to plan flights. I encourage all passengers to check their rights before travelling, and in the first instance to contact their airline, travel agent or tour operator, where they have concerns. We have published a fact sheet on www.gov.uk that will be kept updated, alongside Foreign, Commonwealth and Development Office travel advice.

We are determined to draw the right long-term lessons for the UK’s energy security. Four years on from Russia’s invasion of Ukraine, recent events have again highlighted the risks of exposure to volatile international fossil fuel markets. Last week I attended WindEurope, where I heard from the Spanish Prime Minister and others about how EU countries are responding by accelerating their transitions to clean energy.

In the UK, the Energy Secretary set out last Tuesday how we are going further and faster on our clean energy mission through three strands of direct action:

Firstly, accelerating delivery of clean, homegrown power that we control. In the first weeks of the war, we announced that we would bring forward the next renewables auction to July and speed ahead on new nuclear power. That work is being stepped up through a cross-Government sprint to unlock the potential for renewables on public land, alongside measures to deliver the grid infrastructure we need, including changes to land access rules and to the consenting process for networks.

Second, accelerating electrification across the economy. Technologies such as solar, batteries, heat pumps, and electric vehicles can cut bills and help shield households and businesses from international fossil fuel price shocks. The £15 billion warm homes plan is the largest public investment in home upgrades in British history and is being accelerated to support as many households as possible ahead of winter.

Third, taking clear action to reduce the extent to which gas prices set electricity prices, which can compound the impact of shocks like this. Plans are being brought forward to move legacy low-carbon generators, which provide about a third of the UK’s power today, on to fixed-price arrangements. We have also announced that the electricity generator levy will increase from 45% to 55% and be extended beyond 2028.

Together, these measures will strengthen incentives to move on to fixed contracts and make funds available to support families and businesses with cost of living impacts.

The Government will continue to act to minimise the impact of events in the middle east on families and businesses and safeguard the UK’s energy security, while learning the right long-term lessons for our country.

[HCWS1551]

Ground-mounted Solar Panels: Alternatives

Michael Shanks Excerpts

Tuesday 14th April 2026 Westminster Hall

[The Minister for Energy (Michael Shanks)]

It is a pleasure to speak in this debate. I congratulate the hon. and gallant Member for Spelthorne (Lincoln Jopp) on securing it, particularly because I unfortunately missed his Adjournment debate, which I heard was one of the most enthusiastic Adjournment debates we have ever had on this topic. I was delighted to hear him repeat much of that same speech, because I did of course read it in Hansard. The map joke was there in the Adjournment debate, and it was there again today. We appreciated it all the same, and it was great to hear it in person. I thank him for securing the debate, and I genuinely thank him for the enthusiasm he has shown for floating solar. I will come back to that in a moment.

I was also pleased to hear the hon. and gallant Member say that he believes in climate change. That should not be breaking news to anyone, but when we hear Conservative Members stand up and confirm that science is in fact science, it is none the less a relief to me. I was delighted to hear that. However, the challenge—and I will come back to this point—is that, as much as there is a recognition that climate change is a threat, there is also a distancing from any of the actions that would help us to tackle it, and that is simply not a sustainable position for anyone to hold.

If we think about food security, water security and national security, all of them would be put at huge risk by not tackling the climate crisis. This is a very real challenge for us to deal with at the moment. That more dangerous and insecure world is exactly why we are embarking on the clean power mission.

[Sir John Hayes]

While the Minister is on the subject of science, would he turn his attention to agronomy? He will know that only around 15% of the land in the United Kingdom is grade 1 and 2. Much of that is in the east of England and, indeed, in my constituency in Lincolnshire. Lincolnshire has been targeted by solar developers, with countless large solar plans in the offing. Will the Minister recognise that those two things cannot be squared? We cannot have the most productive and versatile land being used up for solar at the cost of our food security.

[Michael Shanks]

I was going to come to the trading of statistics later in my speech, but let me do it now, because there is a fundamental point around the disingenuous trading of statistics on land use. My hon. Friend the Member for Bournemouth East (Tom Hayes) made a valiant effort at trying to correct that, but let me give Members some sense of this. At the end of 2024, ground-mounted solar panels covered an estimated 0.1% of the total land area of the UK. Even if we achieve the ambitious targets that we have set out in the clean power action plan, they will be expected to cover 0.4% of the total land area and 0.6% of agricultural land. That is if we achieve our hugely ambitious targets.

The arguments that I will make in this speech are exactly those that the previous Government made when they spoke from the Dispatch Box. There was a bright-eyed and bushy-tailed Energy Minister who spoke about the dramatic rise in global energy prices following the invasion of Ukraine, the urgency of building a renewables-based system, and how critical it is for us to meet our 70 GW target for solar in the UK by 2025— the previous Government’s target was a fivefold increase.

The now shadow Minister, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), pretends that that was not the Conservatives policy for 14 years, and we now hear a litany of ideas—roadside solar, rail solar, floating solar—but none of them was driven forward in the 14 years that they were in government. Forgive me if I think that it is a little bit rich for them to be oppositionist, not having driven any of it forward when they were in government.

[Dr Caroline Johnson]

The Minister is talking about using a very small proportion of the United Kingdom. I understand his point, but when all of that small proportion falls on the best bits of agricultural land, that is not sensible. If one were looking at a strategic framework and desiring to use 0.1% or 0.2% of the country for solar, one would look at the least useful land for food security for doing that, not the best.

[Michael Shanks]

I will come on to that point.

[Edward Morello]

The hon. Member for Sleaford and North Hykeham (Dr Johnson) suggests that we should utilise the least useful land going. My understanding, according to the numbers I have looked at, is that at least 2% of the UK is covered in golf courses, which are ecological wastelands. At the risk of alienating all the golfing voters out there, I wonder whether the Minister would like to use that land.

[Michael Shanks]

I will not be drawn on golf course membership, because I do not know how many of my constituents are members of golf courses; I can imagine how many Conservative Members are.

I come back to the point about land use, because we absolutely recognise the importance of having a framework for how we use land across the country. That is why the Department for Environment, Food and Rural Affairs published the first-ever land use framework in March— I recommend a read of it. It is a vision for all of England’s land use, using the latest data on how much we need for housing, energy and all sorts of things to ensure that we are making the best use of land. Both that and the strategic spatial approach to planning the energy system could have been done in those 14 years, but they were not. That is why we have ended up with a haphazard approach to strategic planning, and why we are now building the grid to connect the renewables that were built all over the country without that spatial plan. It is important that we strategically plan that, and it was not done previously, so we are moving forward to do it.

[Robbie Moore]

I have read the land use framework. The Minister has hit the nail on the head, because its sole beneficiary is his Department—the Department for Energy Security and Net Zero—and not our farmers or our food security. Can he specifically address the issue of land quality? If we are putting ground-mounted solar on agricultural land, will he at least recognise that that will degrade the quality of the soil health, given the amount of time that those solar panels will be in situ?

[Michael Shanks]

I will not be able to go into the detail of everyone’s points, but the hon. Member is wrong about the land use framework. Perhaps he should read it again, because it details quite clearly the different land uses across the country. There is always tension about land use—of course there is. That has been true throughout history, and that is why we are strategically planning it.

We are clear that the planning system recognises best use. Every application is considered on its merits; I am not going to be drawn on individual applications, but we have clearly said that ground-mounted solar should be used, wherever possible, not on the best-used land.

[Dr Caroline Johnson]

rose—

[Michael Shanks]

I am not going to give way to the hon. Lady again because I want to come to floating solar, which the hon. and gallant Member for Spelthorne eloquently made the case for. I completely agree that it is a hugely exciting technology that we should be expanding, and I also agree that there are none of the trade-offs that there often are in other deployments and that there are huge benefits. He and I have both visited the project at the Queen Elizabeth II reservoir near his constituency. It is a fantastic example of floating solar, which has the benefits of generating clean electricity and retaining water in the reservoir. We want to see how we can also utilise that power to reduce the local demand so that there are some real benefits for local communities.

We are taking forward a number of actions. I am sorry if the hon. and gallant Member thinks that floating solar was not given a prominent enough position in the solar road map, but I assure him it has a prominent enough position on my to-do list. We are driving those key actions forward because there is no reason why we should not be doing that more quickly. There are projects in the pipeline that we will try to support wherever we can.

On the argument that there is a trade-off between that and covering rooftops, reservoirs, motorways or any other space that people can come up with, I am open to all of those ideas. I agree that we should be doing much more on rooftops. The hon. Member for South Northamptonshire made the point about some of the complexities with landlords and tenants. It is complex, but it is not impossible and we need to work our way through dealing with that.

It is important that we recognise the scale of the challenge. The scale of our electricity demand means that we need to see more ground-mounted solar as well; it is not either/or. Rooftop solar is important in our mission, and floating solar will be important, but the deployment of ground-mounted solar will also be important in communities across the country. We want those communities to get a genuine a benefit from it, so the points around locally owned power are critical.

In closing, I recognise that at this moment in particular, the lessons we have to take from the crisis in the middle east is that we need to move further and faster away from reliance on fossil fuels, but we have to take communities with us on that journey as well. That is why I want to see communities owning more of this infrastructure and benefiting from it. We also need to make the argument to everyone in our constituencies that the reason they have been exposed time and again to sky-high energy bills is because of our exposure to a fossil fuel market that we cannot control. There is no shortcut to building a system that protects us from that and there is no option to simply build another system somewhere else. At some point, infrastructure has to be built somewhere, and it is simply not a reasonable argument to say, “I’m in favour of this, but please don’t build it anywhere near me.” We will not embark on that.

The hon. Member for South Northamptonshire kindly referenced the size of my constituency—I do not think I have ever heard the exact number of hectares. The previous Government built one of the biggest onshore wind farms right next to my constituency. I support that; it is the right thing to do for our energy security. If it was right under that Government, it is also right that we build the infrastructure that we need now, bringing communities with us but also being clear that it is the right path for the country and our energy security.