Energy Bill [ Lords ] (First sitting)

Alan Brown Excerpts

Committee stage
Tuesday 23rd May 2023 Public Bill Committees

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

As ever, it is a pleasure to serve under your chairmanship, Mr Gray, and particularly for the first time as a Minister on a Public Bill Committee. I am sure you will keep me on the straight and narrow over the next few weeks. I look forward to working with you and members of the Committee as we scrutinise this landmark and, as you described it, mighty Energy Bill.

To begin, I want to remind Members of the purpose and background of the Bill. The Energy Bill will provide a clearer, more affordable and more secure energy system. It will liberate private investment in clean technology, reform our energy system so that it is fit for purpose, and ensure the safety, security and resilience of the energy system.

I turn first to amendments 75, 76 and 81, tabled by the hon. Members for Southampton, Test and for Bristol East. Amendment 75 seeks to expand the definition of a transport and storage network user in clause 1 to refer additionally to users who may seek to use carbon dioxide taken off a transport and storage network, not just those who are seeking to transport and store carbon dioxide for its permanent geological storage.

Although there are many uses for carbon dioxide across industrial sectors in the UK, including fertiliser production, cement, lime, and food and drink, as the hon. Member for Southampton, Test set out—indeed, there was little in what he said with which I found myself disagreeing—not all these applications result in the permanent abatement of carbon dioxide. For some of those products, the carbon dioxide is ultimately released back into the atmosphere.

The Government’s aim in prioritising support for the deployment of carbon capture and storage in the UK is to incentivise large-scale, permanent abatement of carbon dioxide and the establishment of a transport and storage infrastructure, which is essential to achieve net zero emissions. Carbon capture and usage technologies resulting in the permanent abatement of carbon dioxide could represent only a small abatement potential as compared with carbon capture when the carbon dioxide is disposed of by geological storage. For those seeking to use captured carbon dioxide, alternative options are likely to be available, such as off-taking carbon dioxide directly from an emitter before it enters a transport and storage network. For those reasons, the Government do not consider the amendment to be necessary or appropriate.

Clause 2 establishes a prohibition on operating at a geological carbon dioxide storage site or providing a service of transportation of carbon dioxide by pipeline without a licence. Amendment 76 seeks to expand the scope of this licensing requirement to include licensing the use of carbon dioxide that has been captured and transported. The licensing requirement in clause 2 is intended to establish a regulated investment model for the transport and storage of carbon. This is a “user pays” economic regulation model that involves the network users—power and industrial emitters—paying for the transport and geological storage of the carbon dioxide that they produce. Licensed transport and storage companies will be able to recover their investment in the transport and storage network through the fees charged for transport and storage services. This model provides long-term revenue certainty for investors to pool through the invested needed to establish and scale up carbon dioxide transport and storage infrastructure here in the UK.

As pipeline, transport and storage assets have monopolistic characteristics, oversight by Ofgem, the independent economic regulator of carbon dioxide transport and storage, will ensure that users are protected from anti-competitive behaviour and that costs are economic and efficient. A model of economic regulation for delivering carbon dioxide transport storage was identified as the preferred option following the Government’s 2019 consultation on business models for carbon capture, usage and storage.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The Minister mentioned Ofgem. What discussions were had with Ofgem about its capability, expertise and resources to deal with what is going to be a whole new suite of competencies for Ofgem?

[Andrew Bowie]

Of course, none of this is without its challenges, and Ofgem recognises that. However, I have regular conversations with Ofgem and the Department is happy that it is indeed scaling up its capability, to enable it to deal with not only the new carbon capture utilisation and storage procedures that we are discussing but the whole range of areas in which Ofgem will have a role as we move towards a net zero future. Given the aims and purpose of the economic licensing framework that clause 2 establishes, I hope that the hon. Member for Southampton, Test will agree to withdraw his amendment.

Amendment 81 seeks explicitly to include within the scope of the term “revenue support contract” a contract for the use of carbon capture. We understand that to mean a contract to support carbon capture and usage. The carbon capture revenue support contracts are intended to support the deployment of carbon capture technologies. The Bill allows for carbon capture revenue support contracts to be entered into with eligible carbon capture entities. Broadly, a carbon capture entity is a person who, with a view to the storage of carbon dioxide, carries on activities of capturing carbon dioxide that has been produced by commercial or industrial activities, is in the atmosphere or has dissolved in seawater.

Storage of carbon dioxide is storage with a view to the permanent containment of carbon dioxide. It is important to emphasise that provisions in the Bill may therefore allow for a broad range of carbon capture applications, including those carbon capture entities that utilise the carbon dioxide, resulting in the storage of carbon dioxide with a view to its permanent containment. Decisions on which carbon capture entities will receive Government support are to be made on a case-by-case basis. Prioritising support for carbon storage is considered essential to help deliver our decarbonisation targets.

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[Andrew Bowie]

New clauses 33 to 36 would insert provisions for the review of the strategy and policy statement, and procedure requirements for the designation of such a statement.

The Bill already contains a number of measures to deliver a cleaner, more affordable and more secure energy system for the long term, as set out by the long title, so there seems to be little to be gained from the proposed new clause 33. The Government’s approach to these matters will be informed by the strategy and policy statement provided for under the Energy Act 2013, on which we are currently consulting.

I turn to new clauses 34, 35 and 36. The 2013 Act introduced a power to designate a strategy and policy statement setting out the Government’s strategic priorities for energy policy in Great Britain, the roles and responsibilities of those implementing such a policy and the policy outcomes to be achieved. The strategic priorities of the Government’s energy policy are to be taken as a whole. They include, but are not limited to, our targets under the Climate Change Act 2008, reducing costs for consumers, tackling fuel poverty, and securing a diverse and viable long-term energy supply. The strategy and policy statement power in the 2013 Act is not specific to the measures contained in any specific Act. The power is wider, and it enables the strategy and policy statement to cover any or all of the Government’s strategic energy priorities, wherever they are set out.

On 10 May 2023, the Government published their consultation on a draft strategy and policy statement for energy policy in Great Britain. We are seeking responses until 2 August, and we intend to designate a final strategy and policy statement by the end of this year. Designation of a strategy and policy statement will ultimately be a decision for Parliament, not for the Secretary of State. I hope that hon. Members are satisfied by those reassurances.

[Alan Brown]

Will that be a wider strategy and policy statement that goes to Ofgem? An overarching energy policy has long been outstanding.

[Andrew Bowie]

I believe that that was made clear. As I said earlier, we are working with Ofgem to ensure that it has the capabilities to deal with all of this. In terms of a national policy statement for Ofgem moving forwards, there will be a series of announcements over the next few months and, indeed, the year that will enable Ofgem and the future service operator to get into a position where they are able to deal with what we introduce through the Bill and other statements.

Clause 1 establishes Ofgem as the economic regulator for carbon dioxide transport and storage. It also establishes the principal objectives and statutory duties for both the Secretary of State and Ofgem in carrying out their functions under part 1 of the Bill. Transport and storage networks will act as the enabling infrastructure for carbon capture and storage from a range of sources, including power plants, industrial facilities, low-carbon hydrogen production and, potentially, direct air capture.

The economic regulation model provides long-term revenue certainty for network operators while protecting network users from monopolistic behaviours, as has already been described. The Government consider that Ofgem is the most appropriate body to act as the economic regulator for carbon dioxide transport and storage, due to its experience and expertise in the economic regulation of the overall energy sector. The selection of Ofgem as the regulator has received broad support from the industry. The principal objectives set out in clause 1 reflect the balance of considerations for a nascent carbon dioxide transport and storage sector.

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[Andrew Bowie]

Clauses 2 to 6 relate to the licensable activities for carbon dioxide transport and storage.

Clause 2 establishes the prohibition on the transport of carbon dioxide by pipeline and its geological storage without an economic license regulated by Ofgem. As carbon dioxide pipelines for storage and site infrastructure are likely to be operated as regional monopolies, a framework of economic licensing and regulation is designed to prevent anti-competitive behaviours. Licensable activities will initially include the transportation of carbon dioxide via onshore pipelines and offshore pipelines, and the operation of an associated geological storage facility. The clause enables other methods of transportation of carbon dioxide to become licensable activities, should that be considered appropriate as the carbon capture and storage market evolves.

Non-pipeline methods of transportation—shipping, road or rail—are expected to form part of wider carbon dioxide transport and storage networks. These methods of transport are particularly important for dispersed sites, where there are emitters who wish to have their carbon dioxide captured and transported for permanent storage, but are not suitably located to join a transport storage network by pipeline.

While non-pipeline methods of transport will have an important role in the development of carbon capture and storage networks, the Government consider that there is currently insufficient evidence to justify economically regulating non-pipeline methods of carbon dioxide transport. As those methods of transportation have differing characteristics from pipelines, with a potential lower cost of entry and an ability for multiple asset-running in parallel, competitive regional markets may emerge naturally for non-pipeline transportation of carbon dioxide. However, should competitive markets not emerge as anticipated, that may be rationale for future regulatory intervention. The ability of the Secretary of State to bring activities within the scope of the licensing framework is particularly important, given the financial support provided by the Exchequer to support carbon capture facilities and to ensure appropriate and effective protections can be put in place for users of the network.

I turn to clause 3. Any future use of the power established in clause 2 to extend the economic regulation framework to other methods of transporting carbon dioxide, should that be considered appropriate, would be subject to statutory consultation, as provided for in clause 3. Under the provisions of the clause, the Secretary of State is required to give notice of their intention to make regulations to extend the licensing framework to other methods of carbon dioxide transportation. That would include statutory consultation with the economic regulator to confirm the rationale for market intervention and consultation with the devolved Administrations.

Clause 4 sets out the territorial scope of the economic licensing framework for carbon dioxide transport and storage. The economic regulatory regime established by chapter 1 and part 1 of the Bill will extend to all parts of this United Kingdom. The licensing regime and economic regulation will also apply to transport and storage activities offshore, both in the UK’s territorial seas and in waters designated as a gas importation and storage zone under section 1(5) of the Energy Act 2008.

Clause 5 provides for the Secretary of State to grant exemptions from the requirement to hold a carbon dioxide transport and storage licence. That provision is important to ensure that the prohibition established by clause 2 operates effectively and as intended and does not, for example, impact or inhibit activities that it is not considered appropriate to economically regulate.

For example, exemptions are a means by which a small-scale operator would not be burdened by licensing costs and obligations that could be considered disproportionate to the scale of their operation. However, exemptions should not enable a competitive advantage over licensed operators. Exemptions will be set out in the way of regulations and may be granted either to a class of persons or to an individual person. A statutory consultation process is set out in the clause, to ensure that appropriate notice is given ahead of making exemption regulations and to allow for representations to be made.

Clause 6 provides for the Secretary of State, by way of regulations, to be able to vary, withdraw or revoke exemptions from the licensing requirements that have been granted under the provisions of clause 5. As market circumstances change, it is conceivable that certain activities, categories or classes of activity that are appropriately exempt from economic regulation in the early years of CCUS deployment may, as the sector matures, be considered more appropriate for licensing and regulation, or the particular activity that was subject to exemption may itself develop or change. That will ensure that any exemptions granted remain appropriate as the UK CCUS industry matures. I hope that the Committee will agree that clauses 2 to 6 should stand part of the Bill.

[Alan Brown]

rose—

[The Chair]

I call Alan Brown.

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[The Chair]

Well, we need to decide which—I call Alan Brown.

[Alan Brown]

Thank you, Mr Gray. It is a pleasure to serve under your chairmanship. I will just ask the Minister a few brief questions.

In clause 3, the consultation on proposals for additional activities sets a 28-day timeframe in which objections or representations can be made, and the clause details that the Secretary of State must consider those. However, there is no timeframe for the Secretary of State to respond, and there is nothing that actually details the process of how representations will be considered and responded to. Could the Minister give a bit more information on that?

Clause 3(3)(b) is about notice given to Scottish Ministers relating to devolved competences, so could the Minister give examples of the types of activities he envisages that covering? Also, what process will the Secretary of State follow in taking the views of the devolved Administrations?

That goes to the wider concern that I have already expressed about the UK Government having powers to interfere in what would usually be devolved competences. I know that it is slightly nuanced in this case, but I just want to flag that I do not want to later have lodge loads of amendments and force votes on replacing “consult” with “approval”. I know that it is slightly different at this stage, but could the Minister give details of what he thinks the activities would be? The same question applies to subsections of clause 5 and 6.

[The Chair]

I presume that His Majesty’s loyal Opposition wish to say something. I remind the Committee that when you wish to catch my eye, it is important to stand up and make it plain that you wish to speak. If you do not do so, I will not call you. I call Dr Alan Whitehead.

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 23rd May 2023 Commons Chamber

[Mr Speaker]

I call the SNP spokesperson.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is nearly 10 years since a £1 billion carrot was dangled for Peterhead carbon capture and storage, which was then withdrawn post-referendum. We are now getting told that the UK Government have £20 billion to spend on carbon capture and storage, but the reality is that not one penny of that is ringfenced for Scotland, and indeed there is not even a budget line for that £20 billion. Instead of another jam tomorrow pledge focusing on nuclear, why does the Minister, who comes from the north-east of Scotland, not focus on getting the Scottish cluster track 2 status so that it can get up and moving?

[Andrew Bowie]

I thank the hon. Member for that question, but frankly I am fed up with the SNP talking Scotland down, and indeed talking the Acorn project down. The UK Government have already spent £40 million supporting the Acorn cluster, which is in a very good position as we proceed with track 2. It would be good if, for once, the SNP was to talk that up and work with us, rather than the opposite.

[Alan Brown]

It would be good if the Minister gave us certainty instead of just blustering.

Energy UK has confirmed that the Brexit trading arrangements are adding more than £1 billion a year to our energy bills and, last year, nearly £5 billion was paid in constraint payments. That is all money that could have been used to upgrade the grid. It could have paid for pumped storage hydro that could have procured a greater level of our world-leading tidal stream technology. It could have funded the Acorn CCS or green hydrogen. Instead of adding £6 billion to our bills, will the Minister tell us how many Scottish jobs have been held back by this lack of investment?

[Andrew Bowie]

When it comes to bluster, SNP Members are certainly subject matter experts. On support for Scottish billpayers, as I said, over the past winter this Government were paying half of everybody’s energy bills in this United Kingdom. [Interruption.] The hon. Member says that that is thanks to the North sea, but that is the very North sea industry that he and his partners in the Green party would close down tomorrow. This Government support the oil and gas industry for our whole UK moving forward.

Energy Bill [Lords]

Alan Brown Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[Grant Shapps]

I thank my right hon. Friend for his intervention. We will be looking very closely at the proposed amendments—the Bill Minister himself will be addressing those in detail, which is the right way to do it—and of course, the regulator is already very largely focused in that direction. As I often point out, of everybody in this place I have a particular interest in making sure we achieve what we have set out to do, because this House has kindly legislated to send the Secretary of State for Energy to prison if they do not meet the net zero commitments, potentially through contempt of court. We take these things seriously, but my right hon. Friend will wish to hear more on that issue from my hon. Friend the Energy Minister.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is fair to say that the amendment about putting a statutory net zero duty on Ofgem does not need much studying. On the issue of clean, inexpensive energy, Hinkley Point C is now going to cost £33 billion. We know that Sizewell C will cost in the order of £35 billion if that follows, and the existing clean-up for nuclear radioactive waste is in the order of £230 billion, so where on earth does nuclear fit into the definition of clean and inexpensive?

[Grant Shapps]

We are talking about energy security, and about a tyrant costing all our constituents a fortune, and SNP Members do not want to fix it. They do not want to have reliable nuclear power—they stand against it. They stand against oil and gas. I do not know where they expect all this energy to come from in a reliable way in the future. However, where there are differences, I want to be constructive with the hon. Gentleman and, of course, the devolved Administration. By and large, that is the way in which this Bill has progressed, so on the other issues—the amendments—we will of course try to find ways to work with the House in considering all of them.

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[Grant Shapps]

I have been following the discussions in Whitby in the hon. Gentleman’s constituency and I want to be clear: we have no desire to trial hydrogen with communities that do not want to see disruption. On the other hand, I know that other communities are keen on it. For the reasons already discussed in this debate, there are clearly pros and cons in switching to hydrogen for household heating and it will not be appropriate everywhere. That is why we want to learn from those trials, but it is also important to recognise that hydrogen for industrial use is a different matter. We are feeling our way into all this. Together with what we learn from the H100 neighbourhood trial in Fife, the village trial will provide critical evidence to inform decisions on hydrogen in heat decarbonisation, which will not be taken until 2026.

[Alan Brown]

I appreciate the Secretary of State giving way on this matter. Just on the point of hydrogen trials and effectively doing it with consent, one of the clauses in the Bill allows companies to go in and disconnect people from the gas grid to facilitate trials. Surely that is the polar opposite of doing it by consent.

[Grant Shapps]

That is a misreading of what the Bill does. I absolutely agree with the hon. Gentleman: I refer to the answer I just gave. Given my record of campaigning against what happened with prepayment meters, he will know that that would never be the intention. The element in the Bill is to enable those trials to take place where they would not be able to otherwise, but as I just indicated to the hon. Member for Ellesmere Port and Neston (Justin Madders), that certainly would not be forced.

The second pillar in the Bill will help to strengthen our energy security and minimise cost to consumers. It will pave the way for an independent system operator and planner, or ISOP, whose focus will be on building a better, more reliable energy system. The ISOP will maintain our energy security, operate at the cutting edge of net zero with long-term ambitious plans and bring electricity and gas systems together into a single institution, enhancing our ability to plan for our energy system in the future and to reduce costs.

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[Edward Miliband]

The right hon. Member wants to re-litigate the last Labour Government. Let us talk about the future. We want nuclear to move ahead, and actually the Government have had 13 years and failed to do it.

[Alan Brown]

Will the shadow Secretary of State give way?

[Edward Miliband]

No, I will not.

Let us talk about how we can get an energy system that is fit for purpose. Nowhere is that more true than when it comes to the grid, where the delays that have been allowed to build up are a disgrace. For all of the Conservative party’s boasts, this is what Keith Anderson of Scottish Power says about the delays to the grid:

“The wind farms that are coming online today were approved when Gordon Brown was in power—that’s a long time ago and we need to be much faster to move beyond this crisis”.

The new independent system operator is a step forward, but there are questions remaining about whether it goes far enough in its powers, remit and independence.

What the energy system sorely lacks at the moment—this goes to the question that the hon. Member for Hitchin and Harpenden (Bim Afolami) asked the Secretary of State—is a guiding mind. It is about not simply balancing the system day to day and hoping that the market provides—this is the purpose of the regulator—but planning for the future of the system as we transition. This is the point: at the moment, that planning role is a job for everyone—the Energy Department, Ofgem and the network companies—but the ultimate responsibility of nobody. That needs to change with the ISOP so that we auction offshore wind in the right places, we plan and build the grid in the right places and on the right timescale, and we have the right amount of power in the system in the years ahead. For us, that is the purpose of ISOP, and during the Bill’s passage we will test out whether its proposals for ISOP adequately meet that vision.

If the regime is to work—I concur with the interventions on the Secretary of State—we need a price regulator in Ofgem that supports and never stands in the way of change. I hope that the Secretary of State’s failure to say that he would oppose such an amendment is a good sign, but obviously Ofgem should have a formal net zero duty. I think that was recommended by the net zero tsar, the right hon. Member for Kingswood (Chris Skidmore), and it was rightly inserted by the House of Lords. However—this is boring but very important—we also need to sort out the issues of planning.

The National Infrastructure Commission recently produced an important report about the delays to planning. It said that, in part, that was the fault of Government, who have not updated their energy national policy statements for a decade. It also said that there should be a statutory duty on the Government to review them every five years, and we agree. Here is the other thing that is important: all relevant regulators, including the Planning Inspectorate, should have a net zero duty, because otherwise we will find the system being slowed down and gummed up. Of course, the views of local people are important and must be taken into account, but we must also make progress.

The Bill could achieve those things to speed up the planning process. However, even if we get all the forms of low-carbon power that we need—I think that we should have all of them—and we sort out the grid and planning, there is an obvious question that the Secretary of State did not address. Even if we get all of those renewables and indeed nuclear, the price of electricity is currently tied to the prevailing price of gas. We do need reform of that system. Labour first called for that in January last year, and I say to the Secretary of State that we will be talking about that in the Bill Committee. We believe that there should be a commitment in the Bill to a timetable for that delinking; otherwise, we will get more drift and delay and we will not reap the benefits of the move to zero-carbon power.

On the one hand, we need the drive to zero-carbon power, but we also need a decisive shift away from the high-carbon expensive path—again, that was raised earlier—and unfortunately the Bill does not attempt to make that shift; it is business as usual on fossil fuels.

On coal, the Secretary of State rather dismissed the intervention of the hon. Member for Bath (Wera Hobhouse). Yes, there has been a good record on coal in the last decade. [Interruption.] He says “Thank you”, and he wants to chunter away, but opening a new coalmine drives a coach and horses through that record. [Interruption.] He says that it does not. We cannot go around the world, as did the former President of COP, the right hon. Member for Reading West (Sir Alok Sharma), telling everybody that they have to power past coal, and then say, “But not us,” because that totally undermines our moral authority. Here is the thing: the steel industry in Britain says it will not use the coking coal, it will not provide the long-term jobs that Cumbria needs and it sends utterly the wrong message on climate. That is why their lordships inserted a provision to ban new coalmines. Labour supports that amendment.

Labour will also table an amendment to ban dangerous, expensive, unpopular fracking. I know that Conservative Members want to say the Truss period was a bad dream—Bobby Ewing in the shower and all that. [Interruption.] I am showing my age, that is true. I am a big “Dallas” fan, actually. Labour will table an amendment on fracking.

We also believe—this is an important point—that the Bill should remove the 2015 duty to extract every last drop, the so-called maximum economic recovery, from the North sea. I can do no better than to quote the net zero tsar, the right hon. Member for Kingswood, praised by the Secretary of State, who did a very serious piece of work—Government Front Benchers are nodding. What he said could not be clearer:

“developing new oil and gas fields is incompatible with limiting warming to 1.5°… There is no such thing as a new net zero oilfield.”

Those are not my words, or those of the Liberal Democrats or any other party in this place. [Interruption.] The Secretary of State starts chuntering, but he should talk to his own net zero tsar, who did a brilliant report that he himself praised.

Let me just explain, for the benefit of right hon. and hon. Members, why that is the right position. That approach will have no impact on bringing down bills. How do we know that? Because every previous Energy Minister has said that. Gas and oil are traded on an inter—[Interruption.] Just pipe down for a minute. The price is set on the international market and 80% of our oil is exported. It drives a coach and horses through any possibility of keeping global warming to 1.5°, according to hundreds of leading scientists and the right hon. Member for Kingswood.

Here is the other thing, which is a new part of this. We now know how much the Government are having to shell out to the oil and gas industry to persuade it to make this investment, because it is in the detail of the Budget Red Book: over £11 billion. The current Prime Minister, the previous Chancellor, introduced a windfall tax, but then he introduced an absolutely massive super-deduction—not available now to any other industry, including renewables—of over £11 billion. Massive, massive cost to the taxpayer, no impact on bills, the oil from Rosebank exported, and driving a coach and horses through our climate commitments—no wonder the net zero tsar concluded that it is the wrong policy for Britain. It is. Government Members can carry on pretending that business as usual is consistent with the science and consistent with what we go around the world saying, but it is not and the net zero tsar has rightly said so. Labour will seek to improve the Bill so that it delivers on the zero-carbon sprint we need.

Next, I want to turn to the second part of my remarks —I will try to speed up, Mr Deputy Speaker—on what the Bill can do to ensure the fairness of the transition. We know that the fairness of the transition is essential if we are to take the public with us, and we know there are huge opportunities. I want to come back to the issue of energy efficiency, because Government Members go on and on about their great record on energy efficiency. Here are the facts. In 2010, there were 1.6 million energy efficiency upgrades. In 2022, there were 160,000 equivalent measures. In other words, there were 10 times more when the last Labour Government left office than there are now.

We know why that has happened. The Chair of the Environmental Audit Committee, the right hon. Member for Ludlow (Philip Dunne), has done many important and learned reports on this question. Massive cuts were imposed on energy efficiency schemes when David Cameron said, “cut the green crap” and the investment has not recovered. That is why the UK Business Council for Sustainable Development says it will take almost 200 years at the current rate to get all homes up to EPC C—200 years. That is not just bad for the constituents of my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who intervened earlier, and the constituents of many others in this House; it also means we import more gas and use more gas supplies. The estimates are that we could cut gas demand by 20% if we got all homes up to EPC C.

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[Alan Brown (Kilmarnock and Loudoun) (SNP)]

For once, I find myself in the unusual position of debating legislation that I do not intend to reject out of hand. I have to admit that I broadly welcome most of the measures in the Bill, particularly those relating to carbon capture and storage and hydrogen models. That said, I must put on record my objection to all the comments that have been made about nuclear. Nuclear is the only energy technology that has become more expensive rather than cheaper over the years, so talk of its making our bills less expensive is collective madness. We need to move away from that. As for the talk about small modular reactors, no design has even been approved for their implementation yet. I do not know how the competition can be judged when there is no approved design for SMRs, and I understand that the process that is going on will take at least another 18 months.

Another aspect of the Bill that I cannot get my head round is the fact that the so- called revising Chamber was deemed to be the right place in which to introduce it. That seems counterintuitive to me, but I will say to the Secretary of State that, if the other place was indeed deemed most appropriate for the purpose, the House should trust the five amendments that were made there and recommend that they should remain in the Bill. Let me say for the record that I support them.

The amendment that would prevent any new coalmines from being opened by the Coal Authority or its successors makes sense if we are serious about net zero. We cannot have the hypocrisy of lecturing developing countries about the use of coal while considering extracting coal ourselves. We cannot have the hypocrisy of Tory MPs’ decrying Germany for using coal while at the same time supporting the new Cumbrian coalmine. We need to end the pretence of a zero emission coalmine that ignores the emissions from the carbon embedded in the coal that is about to be burnt, and we need to end the hypocrisy of arguing for indigenous coal for steel coking in the UK when the coal is generally not suitable for the purpose and 84% of it will be exported to be burnt elsewhere.

As for the amendment to ensure that meeting the UK’s net zero targets becomes a specific part of Ofgem’s general responsibilities, that is just plain common sense. We have heard a number of interventions in support of it, and indeed it is one of the recommendations in the Skidmore review, as well as being called for by representatives of the wider industry including Energy UK, RenewableUK, the Climate Change Committee and the National Infrastructure Commission, and groups such as the Green Alliance. It is logical to assume that, if the Government object to Ofgem’s having a net zero mandate, they are signalling that they are not serious about doing everything possible to meet the net zero target—and when are they ever going to publish the long-delayed strategy and policy statement for Ofgem? For too long they have seemed to suggest that Ofgem should have responsibility for policy considerations when awkward questions arise, when it is clearly their responsibility to set policy decisions for Ofgem in that strategy and policy statement.

For years I have been going on about the unfair transmission grid charging system which penalises Scottish sites where the best load factor and wind resource can be found. As has been re-confirmed by the Green Alliance, the current system, overseen by Ofgem, favours electricity coming from Europe rather than wind farms built in the UK’s windiest areas. On average, according to the alliance, EU electricity generators paid 16 times less in transmission charges to send their energy to England last year than the cost of bringing energy down from Scotland, and Scottish generators are now at a significant disadvantage in comparison with sites in France, the Netherlands, Belgium, Germany, Denmark and Norway. What kind of perverse logic is that?

Worse still, National Grid ESO has confirmed that £4.6 billion was paid in constraint payments last year, mainly owing to the lack of grid capacity between Scotland and England. If ever there was an example of lack of strategy and forward thinking between the Government and the regulator, this is it. Paying wind farm developers to stop generating because of a lack of grid capacity, while either paying fossil fuel generators to ramp up gas generation to meet the demand or importing from the continent at the same time, is madness. Those constraint payments could easily have covered the cost of grid upgrades.

As well as the need for grid build-out to facilitate the renewable energy targets, there is a need for the Government—if they want to deploy renewable energy—to listen to what the industry is saying about the pressures of inflation and how it will struggle to meet the strike rates that have been suggested for allocation round 5. Indeed, some of the biggest developers mentioned by the Secretary of State are struggling to deliver on their AR4 commitments. We need to learn from the Spanish auction, which was a complete failure, to listen to industry and to ensure that that failure is not repeated as we try to deploy renewable energy as quickly as possible.

The Government’s own offshore wind champion has pointed out that they will be well short of the 2030 target of 50 GW of offshore wind. The Government should consider revising the “first come, first served” approach and the ability to hold on to grid consents, which is a prize that companies seek to retain. We need to move away from that system and allow access to the grid for companies that can deploy quickly. The Government rightly talk of speeding up consent processes in England and Wales through the planning system, but we must ensure that Scotland is not left behind. The Scottish Government have made contact with his Department. I am sure he understands that, while Scottish Ministers have responsibility for signing off planning consent for major infrastructure projects, the regulations themselves are reserved to Westminster under section 36 of the Electricity Act 1989. The two Governments need to work together to revise those regulations so that Scotland is not left behind.

Several bodies, including Energy UK and the Climate Change Committee, have called on the Government to apply a net zero test to all policy, regulatory, spending and taxation decisions. I support that, because I know that we need to move away from silo working and ensure that there is a joined-up net zero policy across all Government Departments. I also think that the UK Government should learn from the Scottish Government’s establishment of a Just Transition Commission to place fairness and long-term job creation and transfer at the forefront of net zero, and I call on them once more to match the Scottish Government’s £500 million just transition funding.

I also support the amendment on community energy. As a co-sponsor of the Local Electricity Bill, I support the suggested change to provide a framework to support the growth of a community and smaller-scale electricity export guarantee scheme. It has already been supported by Community Energy Scotland, and 318 MPs now support the Bill, including 125 Back-Bench Conservatives —more than enough to win a vote in the House. The concept is also backed by more than 110 local authorities—including my own, East Ayrshire Council—and more than 80 national organisations.

The organisation Power for People deserves the most credit for getting the campaign to this stage. It is estimated that community energy generation could grow between 12 and 20-fold in size over a decade, which could mean up to 10% of electricity being generated by community-owned projects. That would facilitate additional investment providing returns for communities, building better network resilience with small schemes scattered across the grid—and, of course, that is far better value for money than the £70 billion or so for two large-scale nuclear power stations. In 2021, according to Power for People, community energy groups spent more than half a million pounds on energy efficiency upgrades, helping 21,000 people to reduce their energy bills, while nearly 60,000 individuals were engaged in energy efficiency initiatives. This means reducing energy demand in the entire system. It is clear that the reinvestment of returns by community schemes is a virtuous circle.

A policy that was successful in the past was the feed-in tariff, which secured the deployment of small-scale generation projects, particularly small-scale hydro projects in Scotland. Those projects work: they are proven technology, and last for decades. That is why we need pricing certainty for such generation. Some form of export price guarantee could reinvigorate hydro schemes around the 5 MW capacity, as delivered by companies across the Scottish highlands, such as Green Highland Renewables. It makes no sense for them to have reached maximum efficiency and expertise in terms of designers and contracts, but then to have the rug pulled from under their feet and that expertise lost.

On that subject, I want to put on record again the plea to find a way forward for pumped storage hydropower. I was disappointed that the Minister for Nuclear and Networks, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), said at the Scottish Affairs Committee that that would not happen any time soon. That technology can be deployed right now. It is proven technology that can be deployed fast, and we should be moving forward on it.

On energy efficiency, the Secretary of State was again boasting that the stock of properties rated EPC or above has increased from 14% to 47% since 2010. Yes, that is progress, but it is progress based on addressing the easiest homes first. Clearly, if only 33% of stock has been addressed in 13 years, the target for completing the rest by the target date of 2035 will not be met.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

My hon. Friend mentioned energy efficiency. Is he as concerned as I am that there was no mention of strengthening minimum energy efficiency standards in the Bill, but measures to create powers for the Secretary of State to remove European performance of buildings regulations in the UK are included?

[Alan Brown]

I certainly share my hon. Friend’s concerns. It looks as if that is another Brexit dividend in reverse, where we could end up falling behind our European counterparts as those regulations have helped to drive forward standards in the UK.

To return to the Government’s efforts to upgrade stock and meet the 2035 target, we have to bear in mind that, even as house building continues, new housing is not being built to the correct energy efficiency standards, meaning that as time goes on the number of retrofits that will be required will increase. That is completely illogical and needs to be addressed as soon as possible.

On the slippage on targets, simultaneously, energy companies are finding it difficult to find homes that meet the criteria required for ECO4 upgrades. They are struggling to hit targets. It is clear that the Government will have to revise costing proposals for the scheme, or ECO4 will collapse completely. Of course that will mean the supply chain will move elsewhere and it will be hard to recover the situation. I ask the Secretary of the State to have a wee think on that.

Without action on housing and buildings, there is no plausible path to achieving the fifth carbon budget or meeting the 2030 statutory fuel poverty target. The reality is that about 7 million homes are now classed as being in fuel poverty. Energy efficiency requires much greater urgency, especially in the private rented sector. Now is the time for a proper fair social tariff; I would be happy to support amendments in that area in Committee.

There is no doubt that hydrogen production is needed as part of the net zero pathway. It can provide fuel for shipping, aviation and HGVs, for example. It will be vital for decarbonising some energy-intensive industries. However, there is a growing understanding of the reality of the cost of hydrogen production, which means it is extremely unlikely to be part of a large-scale domestic heating switch-over.

I have previously supported the H100 Fife project, which I want to see come to a conclusion as we need to have an evidence base. However, in reality, hydrogen looks to be too costly and is unlikely to be a solution. Low-carbon expert Jan Rosenow, who was a special adviser to the Business, Energy and Industrial Strategy Committee when we looked at heat decarbonisation, has identified and looked at 36 independent studies that do not predict any large-scale use of hydrogen for heating.

I can see the arguments in favour of hydrogen blending and its benefits as an interim measure to reduce the use of methane gas in heating systems, but more than 20 organisations have written to the Secretary of State outlining their belief that it will be too expensive and just another burden on bill payers. We need clarity on what the hydrogen levy will look like. We know the Government want to pass it on to bill payers, but what is the anticipated cost to consumers? How can an additional levy on bills be justified at this juncture? When France and Germany are investing heavily directly in hydrogen development and with the Inflation Reduction Act in the United States, the Government’s levy proposal means the UK will just fall further behind.

Another concern that I have raised with the Secretary of State is about a clause in the Bill that could allow forcible disconnection from the gas network to facilitate hydrogen trials. It is really important that we do not go down the route of forcing people to disconnect, because that is no way to get the public on side.

There is a lack of joined-up thinking. The Government have said they have aspirations for hydrogen blending, but the current health and safety regulations allow a maximum limit of 2% of hydrogen to be blended into the system. At the moment, there are no proposals to change that legislation, so again the Government’s own targets cannot be met because they have other legislation that needs to be changed to make that happen.

Turning to carbon capture and storage, I welcome the legislation for the licensing and funding models, which is long overdue. This is enabling legislation, and it is clear that there are no definitive models proposed yet. There are also no clear funding pathways. We have the £20 billion a year pledge from 2028, but that has no corresponding budget line and it is at the behest of a future Government. This Government always say that they cannot bind the hands of a successor Government, so saying they can guarantee the £20 billion a year pledge is clearly at odds with that.

In the here and now, we still do not have certainty over the track 2 timeline. I ask the Secretary of State once again, when will Acorn get the backing it deserves? The Scottish Government’s 2030 targets cannot be met without it. Without further CCS clusters, the UK will miss its own targets as well. It is no surprise that the Carbon Capture and Storage Association has written to the Secretary of State outlining its concerns.

In conclusion, I turn to devolution. The Bill is littered with comments that the Secretary of State must consult

“the Scottish Ministers, if the regulations contain provision that would be within the legislative competence of the Scottish Parliament if it were contained in an Act of that Parliament”.

The requirement only to consult is not good enough. As an absolute minimum, the UK Government should seek to work with and obtain the permission of the Scottish Government where regulations relate to devolved competency. This is another example of a power grab, as the matter is set out in the Bill instead of there being collegiate working. I ask the Secretary of State to think again on this, because it is outrageous that 29 clauses have that wording. That relates directly to what I said earlier about the need to revise section 36 of the Electricity Act 1989 to ensure that the Scottish Parliament has full competency over planning, which should be a devolved matter.

Going forward, these matters need to be addressed, and there are many issues that need a strategic overview. I would be happy to work with the Government on that, and I will certainly bring forward amendments in Committee.

[Several hon. Members rose—]

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 18th April 2023 Commons Chamber

[Mr Speaker]

I call the spokesperson for the Scottish National party.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

If we want a proper just transition and greater supply chain security, we need new manufacturing facilities for renewable energy components. Which suppliers and manufacturers has the Minister spoken to about creating new manufacturing facilities in Scotland? How many new Scottish manufacturing and renewable energy jobs do this Government intend to create?

[Andrew Bowie]

We are absolutely committed to building a UK-based supply chain, and that includes, of course, new jobs in Scotland. I would be delighted to meet my Scottish Government counterparts and the hon. Gentleman to discuss how we can progress that further and faster. If we are going to have an even more successful renewable energy industry in this country, it is essential that we have a UK-based supply chain. That is what this Government are committed to achieving and, moving forward, I would be happy to work with anybody so that we can do that.

[Alan Brown]

Obviously, I am happy to meet the Minister and work with him, but what I heard right there was that there is no plan for manufacturing jobs in Scotland, no plan to match fund the just transition fund, no answer to the job losses at Harbour Energy and no firm commitments on timescales for Acorn, and that the tidal stream funding has been halved. There is nothing happening to match the Inflation Reduction Act in the United States and the EU support packages. Is it not the case that at the moment just transition are simply warm words for this Government and that much more needs to be done?

[Andrew Bowie]

Absolutely not. I have gone through in detail exactly what we are doing in Scotland. Indeed, his colleague, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) suggested that there was far too much in my initial answer to demonstrate what we are doing to support transition in Scotland. We will continue to do that, while championing jobs and opportunities across the whole United Kingdom, including in Scotland. That means investing in new technologies and renewables, and supporting our oil and gas industry as it transitions. All of that is possible because Scotland remains in the United Kingdom, which would not be the case if the hon. Gentleman had his way.

Powering Up Britain

Alan Brown Excerpts

Thursday 30th March 2023 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

I call the Scottish National party spokesperson.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I think the greenest aspect of these announcements is the level of recycling in them without the actual funding to back them up. Starting with nuclear, there is no successful European pressurised water reactor project anywhere in the world. Hinkley has almost doubled in price to £33 billion, so we know that Sizewell C will cost something like £35 billion. That is a huge, scandalous waste of money that could be better utilised elsewhere. On SMRs, there is not even an approved design with the regulator yet. At £2 billion a pop, SMRs are not cheap either, and it is a myth that they will lower energy bills and provide security. Nuclear is the only energy technology to get more expensive rather than cheaper over the years.

We need more storage. I keep asking about pumped storage hydro. Please will the Government agree a carbon floor mechanism so that SSE can get on with Coire Glas and Drax can get on with the Cruachan extension? While the United States has the Inflation Reduction Act, when we look at the budget for allocation round 5, funding has been cut by a third from £285 million to £205 million, while we have inflationary pressures of 30%. The reality is that it will not deliver what we need it to deliver. Has the Minister looked at the lessons from the Spanish auction, which failed miserably and did not deliver on allocations?

The Minister knows that we need a greater ringfenced pot for tidal. At the moment, tidal stream energy has a 80% to 90% UK supply chain. If the Government do not increase the ringfenced budget, we risk offshoring manufacturing again. If he is talking about being powered by Britain, he needs to increase that funding for tidal stream so that we are building the UK supply chain.

On CCS, Acorn was not even mentioned in the statement. It was promised to us in 2014, and now it is not even mentioned. Is there going to be a definitive funding allocation for Acorn and are there going to be timescales for that funding, or is it a further betrayal when the Government are taking in £60-odd billion in additional oil and gas revenues? The reality is clear: Scotland has the energy, but Westminster keeps the powers.

[Graham Stuart]

The hon. Gentleman’s party of course opposes nuclear, despite the opportunity it provides to this country, and it means that Scotland does not benefit as it should. He talked about pumped hydro, and I would be happy to meet him to discuss that further.

We are the world leader in tidal energy, although we would be hard pushed to understand that from the hon. Gentleman. We have put a ringfenced number on that, and budgets can be changed. The budgets were set on the basis of those projects that were ready and were coming forward. As that changes through this year, as I very much hope it will, we have the flexibility to change those budgets upwards appropriately. Like him, I believe that tidal has a great future, and I love the fact that we are the global leader. There are many jobs in Scotland and around the rest of the country from it.

On carbon capture and storage, this is a major announcement today. I am delighted about the eight projects for carbon capture that have come forward as part of track 1. Today, we have launched track 2, and we have said in the papers, as the hon. Gentleman will be delighted to hear, that we think the Scottish cluster—and Acorn—and Viking in the Humber are the two best placed at the moment to go ahead, although there will be a competition and we are opening that now. We will be having an extension of track 1, we will be having track 2 and we are cracking on with it. I very much look forward to seeing what the Scottish cluster has to offer, because I know it is particularly well prepared, and that is why it was not a reserve, but the reserve in our track 1 process.

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 28th February 2023 Commons Chamber

[Graham Stuart]

I take it that the hon. Gentleman is talking about tidal stream. I am delighted to say that we are the world leader in tidal stream, and that in allocation round 4—the last round of our CfD—tidal stream was included for the first time. We have greater deployment than any other country in the world, but I am like the hon. Gentleman: I share his enthusiasm for that technology, and hope to see even more from it in future.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Following on from that point about tidal stream, MeyGen in the Pentland firth is the largest consented tidal stream site in the world. To date, that site has produced 70% of global tidal stream generation, but inflation pressures have now put that project at a crossroads. It has the chance to remain the world’s leading project through a genuine scale-up, but what is required now is a £40 million ringfenced pot in AR5. Will the Government do the right thing, step up and back tidal stream, allowing Scotland to continue being a world leader?

[Graham Stuart]

I am proud of the fact that we are a world leader, and of course it is only thanks to the CfD scheme, which relies on levies across the whole of GB, that we are able to realise the renewable potential in Scotland. If the separatists had their way, we would not see the development that I hope to see in offshore wind, tidal and other technologies thanks to the whole of the UK, and Great Britain in particular, working together.

[Alan Brown]

I am really disappointed by that answer. I was hoping that the Minister would give some commitment to tidal stream going forward. If he is talking about the whole UK and how Scotland benefits, he needs to start backing the Acorn carbon capture cluster, too. Scotland could generate up to 300,000 hydrogen jobs within the just transition, and part of that relies on the Acorn cluster getting the go-ahead. Also, Acorn is required for Scotland to meet its 2030 emissions targets. Instead of blunder and bluster, when are the Government going to step up and back Acorn?

[Graham Stuart]

We are the world leader, and the largest deployment of tidal stream in the world is in Scotland. We will shortly be making more announcements about allocation round 5. We will also be making announcements in the next few weeks about hydrogen, carbon capture and the future there, and I have already committed in the House to accelerating our approach to that.

Draft Electricity Supplier Obligations (Green Excluded Electricity) (Amendment) Regulations 2023

Alan Brown Excerpts

Monday 27th February 2023 General Committees

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Edward. The regulations are straightforward, and I will try to keep my remarks to around 15 minutes, so that we can get to the Chamber for the statement. The Minister said that the regulations would help counteract the disincentive, or would incentivise some suppliers to import renewable energy from the continent, instead of generating it in Great Britain. I wonder how much work has been done to assess that, because I note that no impact assessment has been undertaken for the effects of this statutory instrument. I would like to know how the Government think that it will disincentivise that operation.

If we are looking at disincentivising the importing of electricity, we really need to look at the grid charging regime and not have the north of Scotland having the highest grid charges in Europe, because imports of electricity do not pay any grid charges. That is a glaring error that needs to be tackled.

I agree with the Minister that CfD has been a success story; I am quite happy to put that on the record, and to commend it, but as we move to allocation round 5, he is, I hope, aware that there are real costs and inflationary pressures, and there will be real issues with the strike rates that have been talked about for AR5. That needs to be reviewed. I will just make a plug for tidal stream energy: it should have a much bigger ringfenced pot.

Independent Review of Net Zero

Alan Brown Excerpts

Thursday 9th February 2023 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I commend the right hon. Member for Kingswood (Chris Skidmore) for the work he has done, and for securing the debate. I thank the hon. Members who have taken part. As always, I tend to disagree with the contribution from the right hon. Member for Gainsborough (Sir Edward Leigh), but I certainly agreed with most of the others.

There is certainly much to like in the report, with stuff to debate and, of course, some stuff to disagree on. Given that the review was commissioned by the previous Prime Minister, after her ill-informed leadership campaign in which she pledged to remove levies from bills and alluded to net zero as a costly commitment, I welcome the fact that the report was undertaken purely independently and did not go down that rabbit hole. The key thing now is what the Government do with the recommendations, especially in the short term, given that implementation for 25 of them is recommended before 2025. That is critical because existing carbon budgets are off track. We need re-alignment if we are to hit net zero by 2050.

I note that the term “Scottish Government” is not used once in the main body of the report. Although I accept that there is engagement, and that some good practice from Scotland is mentioned in the report, I would have expected more references to and understanding of where the Scottish Government are taking a lead, including on the roll-out for electric vehicle chargers, interest-free loans for EVs, the embracing of onshore wind, peatland restoration, woodland planting, the just transition commission, the £500 million low-carbon fund for the north-east, energy efficiency measures and the roll-out of zero-emissions buses. There is a lot of good practice in Scotland that the rest of the UK could learn from. More consideration is required of devolved Governments’ inability to deliver because of funding constraints and, in the case of the Scottish Government, strict borrowing powers. That also needs to be debated.

What is abundantly clear in the report is the need for stable and consistent long-term policy to be matched by funding. The Treasury cannot be a blocker. As the right hon. Member for Kingswood said, other countries are now taking the lead in investment. The Inflation Reduction Act in the United States is making it a more attractive place for investment in renewables.

The folly of previous chopping and changing, and the cutting of solar and onshore wind from the contracts for difference auctions as part of David Cameron’s “cutting the green crap” agenda, has meant eight years of investment lost overnight from one policy decision. That has stopped the deployment of the cheapest forms of renewable energy. At least I can say that I am glad that we in Scotland continue to embrace onshore wind. We have made it integral to the decarbonisation of the power sector. The fact is that Scotland generates the equivalent of 100% of gross electricity consumption from renewables. That should be held up as a fantastic achievement and an example for the UK Government to follow south of the border.

At least the deployment rate of solar is now recovering and will soon stand at 1 GW installed per year. That means that, in a period of just three years, the solar equivalent of a Hinkley Point C will come online. Solar is quicker, cheaper and can be deployed where required, providing greater grid stability. I agree with the recommendation for a plan to get a road map for 70 GW of deployment by 2035.

I also agree with the right hon. Member for Kingswood about the need for a re-envisaged road map for carbon capture, utilisation and storage to be delivered this year. The report rightly points out that the investment landscape for CCUS and hydrogen is currently unclear, and that needs to be remedied as soon as possible.

Additionally, the track-2 clusters need to be expedited. It is outrageous that the Scottish cluster remains a reserve when it is probably the most advanced of the CCS clusters and is likely to be delivered quickest. Acorn represents the worst example of the UK Government chopping and changing policy and withdrawing funding. The reality is that the Scottish cluster needs to commence for Scotland to meet the 2030 target of a 75% reduction in emissions.

The new Under-Secretary of State for Energy Security and Net Zero, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), obviously knows how important the Scottish cluster is as part of the just transition, and how important it is for jobs in the north- east of Scotland. I hope to hear a more positive response, rather than holding with the mantra of, “It is okay, Acorn is the reserve.” Being the reserve is not good enough, and it needs to commence sooner rather than later.

For the record, I agree with the detail on pages 67-68 that we will still rely on North sea oil and gas as we transition towards net zero. Where I fundamentally disagree with the report is in its continued blinkered approach about new nuclear. New nuclear does not form a great deal or a big part of the report, and there is not much evidence, yet it still comes out as a key recommendation and one of the suggested 10 missions. I disagree with applying the phrase “no-regrets option” to the concept of new nuclear.

The report rightly identifies that four of the five remaining nuclear plants will go offline in the next few years, before Hinkley Point C will come on stream. If the UK grid can cope with that scenario, fundamentally we do not need new nuclear as this mythical baseload. It proves we can cope without nuclear. Nuclear is not flexible enough and is relatively incompatible with intermittent renewables. There are still the issues and costs associated with radioactive waste. If we look at long-term performance, we see that nuclear is not necessarily there when the wind does not blow. Over a 10-year period, each nuclear reactor is shown to be offline for roughly a quarter of the year, so it cannot be depended on to be there when it is needed. The reality is that we need to invest in other technologies, particularly storage, to balance intermittent renewables.

The reality is that the nuclear market has failed, because it is too expensive and too risky. There is not a successful operational EPR plant in the world, yet despite that and the ongoing performance issues at Hinkley Point C, the Government seem hellbent on signing up for Sizewell C and using a regulated asset base model that will transfer risk to bill payers. Some £700 million of taxpayers’ money has already been thrown at the development of Sizewell C. That money could be better spent elsewhere. Capital costs for Sizewell C will be at least £30 billion. Think what that money could do if invested in other technologies and in particular in energy efficiency. I welcome the recommendations about aggressive energy efficiency targets going forward. Not only will that make bills cheaper, but it means healthier homes, healthier lifestyles and demand reduction.

Finally on nuclear, the report highlights elsewhere the issue of rising sea levels. It is madness to propose building a new nuclear power station in an area subject to coastal erosion and at risk of rising sea levels. Also, the report demonstrates that nuclear energy has never got cheaper cost-wise, whereas all other technologies, including battery storage and power-to-X fuels, are now cheaper than nuclear. Figures 1 and 2 from the report make the case that we do not need new nuclear and should be investing in other technologies.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

Does my hon. Friend share my disappointment that the Conservatives embrace so wholeheartedly dirty, outdated technologies, such as nuclear energy, and refuse to fully embrace tidal energy, which has so much potential for our renewables industry, certainly in Scotland, but right across the United Kingdom?

[Mr Deputy Speaker (Mr Nigel Evans)]

Before you respond, Mr Brown, just remember the timings that were agreed.

[Alan Brown]

I will aim to be brief. I wholeheartedly agree with my hon. Friend, and I would like to see the Government set a 1 GW target for tidal stream. We need to follow through on the recommendation of the report and set a clear plan for investing long-term in CCUS, hydrogen production and pumped storage hydro, for supporting a carbon floor mechanism and for replacing the EU funding for the European Marine Energy Centre. I hope the Minister will work with us on planning consents for major infrastructure projects. Section 33 of the Electricity Act 1989 is reserved to Westminster, and there is a sign-off process for Scottish Ministers. If we are going to speed up the consent process, we need to work with the UK Government to do that. Hopefully the Minister will work with us on that with the Energy Bill going forward. There is so much to welcome in the report. I wish we had more time to debate it further, but I commend the right hon. Member for Kingswood on it.

[Mr Deputy Speaker (Mr Nigel Evans)]

I call Kerry McCarthy.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

I thank the Backbench Business Committee for securing this important debate, and my right hon. Friend the Member for Kingswood (Chris Skidmore) for publishing the report and pushing for this debate.

Before I move to the subject of the debate, it will not have escaped the notice of Members—in fact, it has been referenced a few times—that I stand here as a Minister on behalf of the brand-new Department for Energy Security and Net Zero. As my right hon. Friend suggested, this is the first debate for this new Department, on my second day. I hope that demonstrates our commitment to net zero. The Department’s laser-like focus will be on securing a long-term energy supply, bringing down bills and halving inflation, giving the UK cheaper, cleaner and more secure sources of energy—something covered in great detail in part 2 of this excellent report.

The report and the creation of the Department align wholeheartedly with the great strides the UK has already made in our actions to tackle climate change. In 2019, my right hon. Friend the Member for Kingswood and the former Prime Minister, my right hon. Friend the Member for Maidenhead (Mrs May), ensured that the United Kingdom became the world’s first developed country to set a legal commitment to reach net zero by 2050. That was followed by our 10-point plan for a green industrial revolution, published in November 2020. We built on that momentum in October 2021 by publishing the net zero strategy, which set out a detailed pathway to meeting our carbon budgets and net zero targets. That was followed by the British energy security strategy in April 2022, accelerating our ambitions on cleaner energy.

As Members will be aware, since publishing the net zero strategy, the economic conditions have changed significantly, due primarily to the Russian invasion of Ukraine. Energy prices and inflation rose sharply—the former to record levels. In the light of that, in September last year the Government appointed my right hon. Friend the Member for Kingswood to chair an independent review of our approach to meeting our net zero 2050 target, to ensure that we deliver on our legal commitment to reach net zero by 2050 in a way that is pro-business and pro-growth, given the change in the economic landscape.

I am delighted that the results of my right hon. Friend’s independent net zero review were published on 13 January 2023. I wholeheartedly thank him and congratulate him on his work. This is a substantial and thorough report. I assure him that I will read it in full very soon, and that a full Government response will follow later this year. As we have heard, the independent review of net zero heard from businesses, academia, individuals and local government across the country that net zero is creating a new era of change and opportunity. It confirms that the Government have understood that the benefits of net zero far outweigh the costs and have acted on that for some time. It explains the opportunities and benefits of net zero for individuals and the economy, and specifies the action needed in individual sectors of the economy, through to how we enhance the role of local authorities, communities and the individual to deliver a just tradition. [Interruption.] If those on the Opposition Front Bench would listen rather than chuntering from a sedentary position, I said I would read it in full. I have read the report, but I will read all 120 recommendations in full and we will reply in full later this year.

Furthermore, the report reconfirms that the 2021 net zero strategy is still the right pathway, based on modelling on the most cost-effective net zero energy system in 2050, and that the policy should go ahead.

[Alan Brown]

Will the Minister give way?

[Andrew Bowie]

I will not, given that I have made a commitment on time.

The review of net zero recognises that we have all made a great deal of progress through leveraging our international leadership in COP26. The proportion of the world committed to net zero has risen from 30% of global GDP to 90%. His Majesty’s Government have committed more than £2 billion to support the transition to zero-emission vehicles. That funding has focused on reducing barriers to adopting such vehicles, including offsetting the higher upfront cost and accelerating the roll-out of charge point infrastructure.

I take issue with the tone taken by the hon. Members for Bristol East (Kerry McCarthy) and for Brentford and Isleworth (Ruth Cadbury), who claimed that the Government had done nothing on climate. It was a Conservative Government who legislated for net zero. It was a Conservative Government who hosted COP26, and we look forward to working with the UAE as it looks to deliver COP this year to carry on that excellent work. It was a Conservative MP who brought forward the legislation for net zero—indeed, the same MP who wrote the report that we are debating. It was a Conservative Government who hosted the green trade and investment expo in Gateshead last year.

Unlike the Opposition, I am proud that we are leading the way in developing and exporting green technology. There were 430,000 green tech jobs in this country, worth £41.2 billion, in 2022. Companies like Catagen in Belfast, which I visited late last year, are developing green hydrogen and the e-fuels of the future. The hon. Member for Bristol East talked about onshore wind but completely ignored offshore wind. We are the world leader in offshore wind. We have the four largest offshore wind farms in the world off the coast of this island right now.

Despite all that, we are not resting on our laurels. We are raising our ambitions to ensure that we deliver net zero and realise the benefits. In last April’s British energy security strategy, we raised the ambition to deliver up to 50 GW of offshore wind by 2030, including 5 GW of floating offshore wind. We have already invested millions in offshore wind, securing many jobs and up to £320 million of Government support for fixed-bottom and floating wind ports and infrastructure.

To accelerate a reduction in energy demand—[Interruption.] If those on the Opposition Front Bench listen, they might learn something from what we are announcing today in response to the report. To accelerate a reduction in energy demand, the Government announced a long-term commitment in the 2022 autumn statement to drive improvement in energy efficiency to bring down bills for households, businesses and the public sector, with an ambition to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030, against 2021 levels. That will be supported by an additional £6 billion commitment to 2028 and the launch of a new energy efficiency taskforce, further details of which will be announced in due course. By 2030, 95% of British electricity could, if we work together, be low carbon, and by 2035 we will have decarbonised our electricity system, subject to security of supply.

I turn to the concerns raised by my right hon. Friend the Member for Gainsborough (Sir Edward Leigh). As a Member representing a vast rural constituency with a similarly vast road network, I hear the concerns about the EV charging network and the protection of farmland for food security. The Government take this incredibly seriously, and in due course the Department for Environment, Food and Rural Affairs and our Department will publish plans for how we speed up the roll-out of the EV charging network and ensure food security while meeting our net zero ambitions.

We continue to build on the strong progress we have already made. We have many exciting policy announcements in the coming year. The Energy Bill, which is going through Parliament right now, will deliver an energy system that is cleaner, more affordable and more secure. We are committed to publishing an update to our green finance strategy early this year, setting out how we will mobilise finance for the UK’s energy security, climate and environmental objectives, and maintain our position as a leading green finance hub. We will set out the next steps of the United Kingdom’s emissions trading scheme in response to last year’s consultation. We have committed to adopting a zero-emission vehicle mandate, requiring that a percentage of manufacturers’ new car and van sales be zero-emission each year from 2024.

[Alan Brown]

The Minister is talking about green finance. What about the key recommendation that the UK Government have to do more funding-wise, particularly to offset the Inflation Reduction Act in the United States? We have the electricity generator levy here. The US is incentivising investment in renewables. Will the UK Government address that?

[Andrew Bowie]

This Government are committed to incentivising investment in renewables across the piece, working with the energy sector and others. In the full response to this report, which I assure Members will come later in the year, we will set out more plans in that regard. The hon. Gentleman is right; that is something we need to do.

New technology will be critical to the transition, and this comes back to the point made by the hon. Member for Bath (Wera Hobhouse) about phasing out fossil fuels. Of course we need to move away from a reliance on fossil fuels as our energy baseload. That is why we are transitioning. That is why Offshore Energies UK has its “Vision 2035” to make the North sea the first net zero basin in the world. We continue to work with the oil and gas sector as it produces the energy we require and will need for many years to come, and as it invests in the new technologies of the future, including carbon capture and storage—a technology in which there are many projects across the country.