Draft Strategy and Policy Statement for Energy Policy in Great Britain

Alec Shelbrooke Excerpts

Tuesday 19th March 2024 General Committees

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

It is a pleasure to speak in this debate. Members of the Committee will know that I am not a member, so I will not have any view on the consideration at the end. However, I will say that today, unusually for Government procedures, this statement is on the Order Paper for it to go through tonight without any further debate after this Committee has debated it. That is why this is one of the most important debates in which I will participate in this entire Parliament, and why I am here today.

I am delighted to see my hon. Friend the Minister in her place. She will be well aware of many of the local issues. Very kindly, she met me before an Adjournment debate that I was due to have until I got laryngitis and could not do the debate. She will be conscious, in relation to east Suffolk Coastal, that stretch of the coast, that it is quite possible that within about 15 years that small, 5-square-mile area will be responsible for the generation and transmission, via interconnectors, into this country, for the UK electricity network, of 30% to 33% of the UK’s entire use of electricity. As a consequence, local people are understandably concerned about the scale of the development that is happening in an area that already has significant environmental protections. That is why in many ways I welcome parts of this policy statement. Some bits are missing from it, and I would like the Minister to reflect on that. I will say this now, so that the Whips can message the powers that be. I do want the Government to consider not moving the motion tonight and to take the opportunity to reflect on what has been said not only in this Committee but elsewhere, in debates, and indeed in the other House.

Thanks to the Act under which we are discussing this statement, an affirmative resolution is required in both Houses. That is welcome. Unfortunately, the national policy statements that happened recently were not debated in this House and also have significant consequences. That is in contrast to the previous national policy statements that were made and debated in 2011. The particular policies to which I am referring rely on the Government to timetable that debate, and that is under the auspices of the Planning Act 2008, so I am pleased that under the more recent Act, under which we are debating this statement, we certainly get the opportunity to debate.

I know that this document replaces the social and environmental guidance of 2011, but I have a few questions of procedure that I would just like to understand. Right hon. and hon. Members may know that I left Government in November 2023. I have been part of collective responsibility, collective agreement. That does not mean to say that in all my time in office I have not been pursuing some of the wider principles that concern me about the development of infrastructure in that regard. Indeed, in relation to the industrial strategy, talking about offshore wind, I made sure that it was included that both onshore and offshore impacts of transmission were to be considered by the Department for Environment, Food and Rural Affairs in considering the environmental impact that was happening. I am pleased to see that this document does, vaguely, refer to the environment, but I would like to understand from the Minister—in terms of the rules that were passed thanks to the Environment Act 2021 and, due to my time in office, the environmental principles policy statement—what assessment has been made by Ministers specifically in regard to this development of this policy.

I would also be grateful to understand which Cabinet Committee cleared the final document that we are debating today. Was it Domestic and Economic Affairs, or was it Home Affairs? I am conscious that in my time in Government I had back-and-forth with the then Energy Secretary about the national policy statements, which I accept that we are not debating today. Hon. Members may know that I do not have perfect memory any more, after an illness—I had a brain abscess six years ago—but I do not recall specifically going through that, so I would be grateful to understand which Cabinet Committee cleared the legislation to come forward.

One of the aspects of why the environmental principles policy statement matters is that it is designed to ensure that we protect and enhance our environment and protect England’s unique natural assets. The part of the country that I represent is generally as flat as a pancake, yet it is about to have multiple energy converter sheds that are about four times the size of the outer edges of Parliament Square and the Treasury. There is not just one shed; there are multiple. I cannot see in any part of this statement, apart from at a generic top level, that in some way the new ESO will be required to even consider that in any level of detail.

I should be grateful if the Minister would publish any assessment made with regard to the environmental principles policy statement for transparency, so that it can be open to consideration by my constituents and others. Indeed, I am conscious that other Members of the House, from Lincolnshire and Scotland, including one of the Energy Ministers, are concerned about the development of such infrastructure. Certainly, the precautionary principle in the environmental principles policy statement is designed so that when evidence or consideration are given, aspects can be postponed, and I believe that that requires some substance to be added.

One of the historical elements of Ofgem is that it has always been driven simply by price or value, which is a challenge at times. I appreciate that that has an impact potentially on energy bills in the future. However, there is a risk at times that people know the price of something and the value of nothing. That is what we need to be concerned about as we take forward this holistic, whole-system approach, and that is why I generally support the statement before us. For the first time, it is taking us into a situation in which we will have that sort of spatial energy plan, However, at the moment it does not feel like the ESO is taking that into account in any way, nor has it taken it into account in some of its decision making so far. It is not covered in the policy statement in terms of sections 164(1)(c) and 164(1)(d) of part 5 of the Energy Act 2023. It does not seem to consider

“the whole-system impact of a relevant activity”

nor

“the desirability of facilitating innovation in relation to the carrying out of relevant activities.”

I know that my constituents, and constituents elsewhere across the country, have been promoting for a long time the idea of an offshore grid. I have also pushed that in the past to what was Suffolk Coastal Council—it is now East Suffolk Council—and worked with right hon. and hon. Members from East Anglia in particular on that. I am also concerned that despite all that and the past work that we have done, the Government and the ESO, as it will be constituted—it is the independent element of the National Grid today—will simply plough on. I am conscious that the substation being placed in a village called Friston at the moment offers connections to Sea Link, LionLink, Nautilus and various offshore wind farms. I cannot quite remember how many; I think there are about four or five. It has just announced— except that it does not announce; it has quietly put it on its spreadsheet, but at least there is some transparency —a further two solar farms of 249.9 MW each. Once again, there is a brand-new addition, and the place has not yet even been built. That is the frustration.

Members of the Committee may just think that I am being a nimby; I am not. This has nothing to do with pylons in my constituency, but I appreciate that it does in the constituencies of other hon. Members. We already have pylons. Under the proposals so far, there is no plan to have any more pylons, although I appreciate that there may a risk of them in the future. My constituency is the home of Sizewell C, which is referred to in the policy statement regarding nuclear. That is about how important it is, and the investment that the Government are putting into it. They recognise the need for energy security and generation so that we are not reliant on the likes of Putin, so that we try to become more resistant to the energy shocks that we have experienced in the last year or two, and so that we recognise the impact that it has on consumers and the security of what we are trying to do.

[Sir Alec Shelbrooke (Elmet and Rothwell) (Con)]

My right hon. Friend mentioned Sizewell C. A huge environmental impact study was believed to have put back the planning process. Does she have any insight into what that may do to the ability to bring nuclear reactors online in the planned timeframe?

[Dr Coffey]

I am conscious that the planning timeframe is one of the reasons for creating the process that we are going through. I can honestly say that EDF spent a lot of time going through it and planning ahead, and I give credit for that. I have constituents who always have and always will oppose nuclear, and more have done so recognising the impact it will have. However, I was assured by our regulators, the Environment Agency and Natural England that the mitigations put in place and the modifications along the way would be sufficient to recognise the area of outstanding natural beauty and all the designations that we have, while accepting that there might be some disruption. I am conscious that the issue is of concern. Candidly, I think there is more concern about the Sea Link project, not only in my constituency but in that of my right hon. Friend the Member for North Thanet (Sir Roger Gale), which, as it stands, would struggle to get any environmental clearance at all.

We have a combination of factors. I agree that we need a whole energy plan in the future, and the Government are, rightly, in order to achieve net zero, trying to accelerate this strategy. However, what worries me is that they are accelerating it without necessarily having done the work. I give credit to the Government for making this strategic change, which was absolutely necessary as we move away from gas and coal. Inland, we had a hub and spokes approach. We are now bringing in most of our energy from the coast and abroad, so we do need to work through the impacts of that. What I am concerned about is the acceleration that is being proposed in a different way. Communities want certainty. What they do not want is a botched job along the way, which is the risk of aspects of what we are being asked to endorse today.

I will turn to the policy summary of responses. I will not be brief; I apologise to hon. Members, but I have told them that this one of the most important debates I will speak in. In question 1, 60% of the people who expressed an interest said that they felt the strategy and policy statement identified the most strategic policies and outcomes for Government in formulating policy. However, in question 2 on the role of Ofgem in achieving that, only 40% agreed, and on the role of the future system operator, which is being rebranded as the National Energy System Operator, only 46% agreed.

I want to ask the Minister how the responses to the consultation have been taken into account, and what changes have been made as a result of the feedback. I am conscious that people think that consultation is just a rubber stamp, and to some extent it is. However, the Government are supposed to show that they have considered the views that people have put forward and justify why they have rejected them, which is why responding to consultations takes so long. I want to get an understanding of that.

In the summary of responses, the Government talk about the establishment of the national ESO. My understanding is that it is supposed to be established by the summer of 2024. I have been in Government long enough to know that summer can actually mean up until December. However, if it really is being established within the next three months—by the summer recess —why do we need to decide this matter now? I appreciate that it has already taken a considerable amount of time, but we should ensure that we get it right, so that we do not have to go through another consultation within the next 12 months. I think that would be helpful.

The hon. Member for Southampton, Test has already mentioned the timing. I think I understand; I think it is fair to say that, since the Energy Act that created this new body was only created by the Government in 2023, it is sensible that this has been done now, but it is still somewhat incomplete.

One aspect I would like to understand further is the automatic element of offering connections. In December 2023, the Government responded to the transmission acceleration action plan, which they had rightly been considering. It has been the practice that someone can just say, “I want to connect,” and National Grid or the new NESO has basically had to say yes, and has had to cobble together where that can go. That leads to a really inefficient situation. Once a connection is done, we can pretty much guarantee that almost any big shed can be built in that area without anticipating any normal planning process. I appreciate that the policy of nationally significant infrastructure projects —the NSIPs—is a democratic way of operating, but it does not feel like that when the connection is already offered several years in advance; it comes across as a fait accompli. That is really frustrating for local communities. That is true in my own constituency and right along the east coast, and I expect more Members in Lincolnshire will start to feel the same.

NESO is intended to be independent. One of the key elements here is energy security—it is a key policy that NESO, with Ofgem, has to effectively deliver. There is no indication in the policy statement of how that energy security is translated, if those bodies are supposed to be independent. I hope the Minister can reassure me that NESO and Ofgem will have sufficient knowledge of pretty secret stuff that the Government discuss in the National Security Council on the security of energy.

One of the things I know we have to be mindful of are foreign actors who regularly try to intervene in the cabling between the UK and the continent. How will NESO and Ofgem have access to that sort of knowledge?

I understand that one of the developers, LionLink, is deliberately trying to bring its cables in at Southwold or Walberswick in my constituency, because it would need to cross 13 or 14 other cables to connect further south. I am concerned that we already have on our seabeds what feels like a version of the M25 on steroids. We need to be mindful of that when we consider any further connections.

There is another aspect where this needs some revision or improvement. The Government should ultimately be in charge of the strategic spatial energy plan—the SSEP —and it should not be delegated to the NESO. It is ultimately for Ministers to make decisions. We should be mindful of trying to hold to account those officials who do things on our behalf, but I do not think it works for communities for the answer to be, “It is not my decision.” It is only not their decision because they have decided to give it away. There are challenges there. In its evidence to the Select Committee, National Grid suggested that the SSEP should ultimately be owned by the Government. It went further, in saying that it should be absorbed into national and local planning guidance in order to accelerate decisions for the transmission needed. The policy statement needs to make it very clear that, ultimately, the Secretary of State should sign off the SSEP in the future.

I am conscious that an interim SSEP is supposed to be being prepared. Could the Minister tell us where we are in that process?

This statement is, I believe, intended to help facilitate efficiency in the queue-based system. But what happens when the developer changes its mind? In the south North sea, ScottishPower Renewables set about creating part of the East Anglia array. We worked with the company locally to plan for the future, so that we did not have multiple or mass disruptions. The intention was for direct current to be transmitted and pulled in from the wind farm and to go straight through cabling to the principal energy converter at Bramford. A substantial amount of design and work was done, and there was engagement with communities, because again it involved significant disruption; to give the Committee a sense, when they lay a cable, they dig out a patch with a width about the length of this Committee room. The intention was to bring in more cables, so it would be a much bigger size and then they could pull through the cables as and when they were needed. Instead of having three different routes, we would end up with just one route, but it would be bigger. We could think of it as the M25 compared with the A12—or perhaps the A1 is a better analogy for the hon. Members here.

In the contracts for difference auction, ScottishPower did not get the price it was looking for, so it decided to say, “Oh, we’ll rip that up”—bearing in mind that it had already been through the NSIP—“and go to AC, because that is less money for us.” It still causes the big disruption, because the construction had already started; but as a consequence, the company needed to create new connections for the rest of the windfarm. That has led to us ending up with the converter station in Friston.

That is the problem. I do not understand what direction is being given to the ESO, or indeed to Ofgem, in this policy statement about what happens when, after a community has gone through all that, a change is made to the NSIP. Basically the developers can change their mind and hold the Government to ransom, because otherwise they would not have proceeded with the project at all, and we know we need to get to net zero. That is an example where co-ordinating and planning was done—years ahead of where we are today—and yet we were screwed over by ScottishPower Renewables. That is why there is a lack of trust in what is happening in the acceleration of this plan.

Turning to the document itself, I want to raise a few issues. I am conscious that Ofgem says what developers can and cannot do—there is a famous story about Chris Huhne creating a “pretty pylon” competition about a decade ago. EDF put forward the cost of using the pretty pylons rather than the ugly pylons, and I do not know exactly what happened, but Ofgem would not allow EDF to raise bills to pay for the pretty pylons, so that felt like a waste of time.

On page 11, the statement talks about the need to

“secure that all reasonable demands for electricity and gas are met;”

and I think that is the sensible part. The National Energy System Operator, as set out in the Energy Act, will be required to

“carry out its functions in the way that it considers is best calculated to promote the objective of ensuring security of gas and electricity supply”—

which is absolutely right—

“meeting our statutory decarbonisation targets and promoting coordinated, efficient and economical systems”.

That is where it starts to get tricky. There is no mention of the environment in there, or of how, if at all, NESO may be instructed to do the environmental principles policy statements.

The statement goes on to say:

“NESO will be a public corporation…independent from other commercial energy interests”—

again, that was one of the key points in the Energy Act. My constituents seem to think that BlackRock is making a lot of these decisions, solely on the basis that BlackRock is one of the key owners of National Grid, but that has always been separate. However, it also says:

“The government will be sole shareholder of NESO, and thus retain ultimate responsibility, however it will not exercise control over NESO’s operations. NESO will be licensed and regulated by Ofgem”.

That is where I have more difficulty. We do a lot of planning permission, setting out a variety of elements and other rules on how independent organisations are supposed to operate. I do not expect the Secretary of State to have to sign off the location of every single pylon, but it concerns me that at the moment I cannot see a specific role in this statement for how the Secretary of State will be involved in the strategic spatial plan. Ultimately, we need to be able to hold the policy to account in Parliament, and I am worried that that is simply not happening and that it is being pushed away.

Page 13 of the statement mentions

“a Centralised Strategic Network Plan…for electricity transmission onshore and offshore, building on ESO’s current role in delivering the Holistic Network Design”.

In the 2022 leadership contest, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss) basically said that we should move to undergrounding everything—no pylons—and that is certainly one approach. The present Prime Minister, however, suggested that he would re-consult on innovative and alternative solutions to the scheme that National Grid had put forward. I am not aware that that has happened. He also committed to various groups that he would do all he could to reduce the amount of infrastructure required onshore. That has certainly not happened, nor has it taken into account section 164(1)(c) of the Act on innovation.

This is not trying to construct something from scratch; the offshore grid connection is already happening in other countries in the European Union. The statement does not take account of our wider approach to development of trying to promote brownfield development over greenfield. At the moment, the approach of the NESO is whatever is cheapest for the developer, not thinking about wider energy transmission loss that happens once DC is converted to AC.

Instead, the NESO should be thinking about taking electricity into Tilbury, Isle of Grain and even Bradwell, where existing transmission network needs to be upgraded. My right hon. Friend the Member for Maldon (Sir John Whittingdale) is keen to see small modular reactors there in future, but the point here is the existing brownfield sites. In my constituency, this is all greenfield development and all about taking out farming land. Some farmers have been prepared to sell, and I understand that, but others will be blocked from doing what they love and cherish on that family farm that has been passed on from generation to generation. Compulsory purchase plan orders are already being submitted and that is soul-destroying for farmers in Suffolk Coastal.

Consideration of where the connections should go seems, as I say, to be in the interests of developers, rather than those of the country as a whole, but another aspect—back on page 13—makes me wonder what consideration has been given to food security in the development of this policy. Have the whole-system impacts been thought through? Nothing has been developed so far about the offshore grid, and that is really missing. We should not be thinking just about the next five years.

I know that the acceleration is all about trying to get to 2030, and I appreciate—I say this frankly to the Opposition—that since the Conservatives came into Government in 2010, we have generated 99% of the amount of renewable energy that has been created, as opposed to what had happened previously. However, I am also conscious that as we hurtle towards that date, we are not taking into account the whole-system impact or the lifetime understanding of the value for the future.

On page 14, under the heading “Cross-cutting”, the document states:

“The purpose of this is to enable government and Ofgem to draw on the specific expertise of NESO and allow policy decisions to be based on robust evidence, with NESO’s independent consideration of whole system network impacts”.

In response to what the Minister or one of her colleagues asked for, a comparison grid was mentioned. It has been well documented that undersea cabling from wind farms in Scotland down to Lincolnshire, to Humberside, is happening. We were trying to understand collectively, as a group of MPs in East Anglia, why no consideration seems to have been given to what is happening in East Anglia. That has happened but it is odd that as part of that approach, NESO is basically saying, “Yeah, we are doing this, but it won’t make any difference.” Again, that frustrates the local community, and is more evidence to suggest that we were right all along.

I am conscious that there will not be one solution that pleases everybody. I get that, and we must have those wider considerations, but it does feel that my constituents are being shafted in this proposal. As I said, I am not being a nimby; we have Sizewell C. I am concerned that some of the short-term elements do not include a longer term cost or environmental impact, and that needs to change in this policy statement.

On page 16 and the appropriate use of competition, I would love to hear from the Minister what happens to those developers who simply pull out when it does not suit them. What are we doing to ensure that they do not pull out and ruin people’s lives? Going on to page 18, I agree with the strategic approach, for creating a more efficient system. Surely, it would be more efficient to have the energy brought into London and parts of the south-east much closer, because the energy drop-off in transmission is not efficient. We should get that connection much closer.

I have already asked a question about when the interim SSEP will be published. On page 24, I support the elements on supporting nuclear. As I said, the environmental regulators were content for that to go ahead. I am very supportive of the hydrogen strategy on page 21. I was surprised recently, however, by a change of view from National Grid and NESO about whether hydrogen can play any meaningful role, which concerns me. I am conscious of developments that need to happen as part of Freeport East, but I think that change has sent the industry rather cold. I am worried that we are cutting off hydrogen too early. I appreciate that the road map that the Minister has in her policy overall is important to try to deliver a low-carbon, hydrogen-heating neighbourhood trial by 2024 but, more broadly, I hope the Government will continue to press, to ensure that hydrogen is a part of our future.

In Section Two on page 26, I am conscious of some of the energy tariffs. Do not get me wrong: I am not seeking to inflate energy prices massively, simply because of constituents concerned about developments in Friston, Saxmundham, Southwold, Walberswick and Aldeburgh. People who visit those places know how flat and beautiful the area is, and how important to nature. I am doing this because I want a whole-system approach that would take that longer-term assessment.

I am sure the Committee will be thrilled to know that I intend to wind up. I want to ask the Minister please not to move the motion on today’s paper. Even if colleagues are just reflecting on some of the comments made today, and perhaps the incomplete response to the consultation, this matter should not be rushed. Once we have laid this, this will not happen for some time. I am conscious that there is a lot of work going on. In the short term, I would like the Minister to direct National Grid and NESO not to offer any more connections until the interim spatial strategy energy plan is granted.

That is really critical. It is important that we do not just keep ploughing on making the same mistakes that so many elements of the policy statement are due to correct. Why keep adding things, which I already think are in error, that could quickly undermine the success of the spatial strategy?

I am grateful for the patience of the Committee. This might not be a No. 1 topic in Members’ constituencies, but it is a most important one in Suffolk Coastal. I am grateful to be able to speak today and set out clearly why I believe that more needs to be done to the policy statement and with the attitude of the ESO and Ofgem so that we can go forward together and have a brilliant energy system for the future. The Department and every hon. Member here wants to see that, but we need to make sure it is done right.

Energy Bill [Lords]

Alec Shelbrooke Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

[Andrew Bowie]

On the hon. Member’s first point, absolutely, we remain committed to delivering, developing and rolling out heat pumps across the country, and we remain committed to the targets we have set out. On the community energy fund, there is already an equivalent Scottish community energy fund up and running and delivering for communities across Scotland. That is a competency of the Scottish Government at Holyrood. I would be delighted to direct any questions that he or his constituent have on that to the Scottish Government in Edinburgh. [Interruption.] He makes the case from a sedentary position that energy is reserved. Yes, but the Scottish Government have their own community energy fund. We will base a lot of what we are doing on that fund as it is rolled out in Scotland.

With your leave, Madam Deputy Speaker, I will take some time to explain the not insubstantial number of Government amendments to the House. I turn first to Government amendment 148 and the subsequent consequential amendments. I think it is fair to say that considerable concern was raised about the initial proposals for a hydrogen levy. The Government have carefully considered those concerns. I particularly thank my hon. Friend the Member for South Thanet (Craig Mackinlay) for his amendments on the issue, and indeed the right hon. Member for Doncaster North (Edward Miliband) for his amendments relating to those clauses. It is right that we take these considerations seriously and, where appropriate, seek to make changes.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Will the Minister give way?

[Andrew Bowie]

I would be delighted.

[Alec Shelbrooke]

May I take the opportunity to thank my hon. Friend for reflecting on what I said in Committee and for the commitments given to me by the Government to bring about an amendment to the Bill? I thank him for listening to Back Benchers’ concerns in Committee.

--- Later in debate ---

[Alec Shelbrooke]

Will the hon. Gentleman give way?

[Dr Whitehead]

No, I will not give way again.

My hon. Friend the Member for Birkenhead (Mick Whitley) has a particularly interesting new clause on tidal range. With the right effort and the right investment, a huge acceleration of build-out can be achieved. Indeed, we have set out our plans on how to do that over the next period. What we need is for that ambition and those plans to be in legislation and in the Bill now.

The Minister did not give any indication in his contribution of whether the Government will move towards any of these amendments, but we hope to press some of them to a vote this afternoon. However, I have to say that we do so within the general setting that we are supportive of the Bill. We want it to succeed, but we want it to succeed with our bits added on, not least because this is the Bill that we will inherit when we are in government shortly. We will then have to do all the work that the Government have set out in the Bill.

Finally, let me say to those hon. Members who are thinking of voting against our amendments that they contain the Government’s own ambitions. What we are trying to do is to put the Government’s own ambition into legislation and provide ways by which it can be achieved. If hon. Members decide to vote against these changes this afternoon, they will, at least in some measure, be voting against their own Government. I hope that they will have sufficient sense to make sure that they do not do so as far as this Bill is concerned.

--- Later in debate ---

[Alec Shelbrooke]

It has been a pleasure to speak on the Bill on Second Reading and in Committee, but I agree with my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) that it is a great pity we cannot have a long debate on Report or Third Reading, to expand on issues further.

One of the issues that I wanted to expand on is about some of the alternatives. We keep talking about electric vehicles moving down, but hydrogen combustion vehicles offer a real opportunity to move forward. We also talk about net zero, but this has now moved to zero-emission vehicles. That rules out hydrogen combustion, so again, we are going down a rabbit hole of just having electric vehicles, but an electric vehicle is not a zero-emission vehicle. If it was, the underground would have the cleanest air in London, and it does not, because there are a lot of particulates around it.

My hon. Friend the Member for Rutland and Melton (Alicia Kearns) makes it clear through new clause 47 that we have to look at the sources, and new clause 37 relates to where batteries go. We keep talking about the rare earth metals that are needed. Indeed, the hon. Member for Angus (Dave Doogan) talked about being able to maintain baseload by using various aspects of energy storage. We keep coming back to the need for rare earth metals and materials to enable that, and they come from areas of the world that we do not have an influence over. In the past 18 months, there has been a huge debate about the fact that we cannot be reliant on Russian energy, and yet few Members in today’s debate have recognised the fact that we are wholeheartedly moving towards becoming reliant on China to supply our energy needs.

This is a huge Bill. It is a fundamental Bill that we have brought forward as we look to the future, but it is far too big, with far too many aspects to it. It has become a bit of a hodgepodge, saying, “We want electric vehicles. We want electric heating in homes. We want to have arc blast furnaces rather than coal furnaces, so we will ban new coalmines.” I promise this House that if we move to just arc furnaces, we will destroy steel manufacturing in this country, because we do not have the ability now to produce the electricity that is needed. We are not going to switch off the lights in people’s homes before we switch off an arc furnace, and once it has been switched off, we cannot switch it back on.

That is the big mismatch in the Bill, which is why I regret that we will not have a Third Reading debate to discuss these issues on a slightly wider basis. The rush to renewables is happening quicker than the timeline for making sure we have enough turbines, as my right hon. Friend the Member for Wokingham (John Redwood) pointed out. My hon. Friend the Member for South Dorset (Richard Drax) made very important points as well. Although the aims are there, and I think we all want to follow those aims—not being reliant on foreign energy is highly important—at the moment there does not appear to be a connection between these things as they come online. As such, although the aims of the Bill are good, we have to make sure that we implement them over a consistent timeframe so that we take the public with us.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

The beautiful food-producing farmland in my constituency is a particular target for industrial-scale solar farms, often backed by prospectors who have no personal connection to our area. This raises huge concerns among my constituents about the scale of the projects and the lack of thorough consultation. With the imperative of food security on our minds, we must explore alternatives to covering vast expanses of our productive land with solar panels.

Many people do not appreciate the scale of the issue, so to illustrate the magnitude of this challenge, I will highlight one proposal for a solar farm in my constituency. It aims to engulf a staggering 587 hectares of land, just under half of which is grade 1 to grade 3A farmland—the very best and most versatile agricultural land, the best land for food production. In fact, almost 10,000 acres of my constituency are currently open to planning for solar farms. Those farms will dwarf villages such as Witham St Hughs, Thorpe on the Hill, Bassingham and Holdingham, and will almost encircle villages such as Scopwick, Digby and Ashby de la Launde.

I do not stand against solar panels in principle; I have previously spoken about the unexplored potential of utilising industrial roof spaces for them. However, I do not believe that covering our farmland in solar panels is the right thing to do, and I vehemently object to the lack of food security it could produce. I therefore support new clause 48, tabled by my hon. Friend the Member for Rutland and Melton (Alicia Kearns), which seeks to solve this injustice and put an end to these large-scale projects. Furthermore, I appreciate that that clause also encourages future developments on brownfield sites, which are far better suited to such endeavours. Let us work together to protect our precious farmland, maintain our food security, heed the concerns of our constituents, and chart a more sustainable path for our energy future.

I was also shocked to hear that more than 90% of solar panels may be made by, or have elements that come from, slave labour. As we discuss the slavery of the past, let us do all we can to prevent the slavery of the here and now. I therefore also support new clause 47, which should be pushed to a Division later.

Lincolnshire as a whole produces a vast amount of this country’s food, yet 22,500 acres—1.3% of its land area—are currently open to applications for solar panels. As such, I ask the Minister to answer two questions in his summing up. First, what will we eat when our best and most versatile farmland is covered by solar panels? Secondly, what is his assessment of the impact on the environment of growing energy from solar panels instead of food, then importing food from elsewhere?

Energy Bill [ Lords ] (Fourteenth sitting)

Alec Shelbrooke Excerpts

Committee stage
Thursday 22nd June 2023 Public Bill Committees

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

It is a pleasure to serve under your chairmanship, Mr Gray. I want to make quite a few comments on the clauses, but I hope we are more than halfway through the debate, given how long we spent on it on Tuesday. You were not here then, Mr Gray, but the Labour Front Benchers shared their contributions, which is a luxury that I do not have as the only SNP Front Bencher. I warn the Committee to buckle up for what is now going to be an Alan monologue for a wee while, so be prepared!

First, I want to make some comments about Tuesday’s discussion of the merits of clause 270, which was inserted by the Lords. I am sorry that the hon. Member for South Ribble is not in her place; I would rather be saying this with her directly opposite—

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Will the hon. Gentleman give way?

[Alan Brown]

Shortly; I will make the point first. On Labour and the SNP being against opening coal mines, the hon. Member for South Ribble said:

“This is one of the most jaw-dropping moments I have ever had in my parliamentary career. The Scottish National party and the Labour party are arguing against domestic jobs, our proud coalmining heritage and energy security for this country. Is that not flabbergasting?”––[Official Report, Energy Public Bill Committee, 20 June 2023; c. 356.]

That was a week in which the former Prime Minister resigned and was proven by the Privileges Committee—with a Tory majority—to be a serial liar, and in which Parliament voted to effectively sanction what would have been a 90-day suspension. I find that a bit more jaw-dropping than ourselves and Labour opposing new coal mines.

[Alec Shelbrooke]

To help the hon. Gentleman, I merely say that my hon. Friend the Member for South Ribble is unfortunately detained in the Chamber because a huge bomb factory was found in her constituency this morning and she needs to raise that on the Floor of the House. I know that my hon. Friend will be here later.

[Alan Brown]

I thank the right hon. Gentleman for that clarification. I was not casting any aspersions about the hon. Member not being here; I was just saying that it was unfortunate when I am addressing her comments. I note how important that issue in her constituency is and hope it gets resolved.

On coalmining heritage—I do not think I need to point this out, but I will anyway, as an obvious history lesson—the coalmines were shut down as a result of Maggie Thatcher putting her anti-union ideology ahead of the coalmining industry. At that time she was more than happy to import coal from the likes of Poland and bring it in from overseas while shutting the coalmines here. That is a fact.

--- Later in debate ---

[Alan Brown]

Excitement is sometimes quite tempting, Mr Gray, but I will try my best. I am trying to draw together the history of the coalmines and the issue of whether we should go forward with more. On the intervention, it is not usually for me to agree with Barney Crockett, but Labour’s energy policy is certainly all over the place.

We are debating opening new coalmines, but the reality is that there are now not too many people, even of working age, who have actually worked in coalmines—that is how long ago they were shut down—so there is not even a skillset out there that would be able to operate much of the mines. I realise that technology has moved on—the proposed mine at Whitehaven will use modern technology—but skilled labour will still be hard to get and the Government’s immigration policies will prohibit skilled miners coming from elsewhere.

Labour and the SNP are against coalmines, but we need to look at the wider context and consider the comments of the right hon. Member for Kingswood (Chris Skidmore), who was commissioned by the Tory Government to undertake a net zero review. His report was supported and commended by Members on both sides of the House, who agreed with its recommendations. Before the decision on the Whitehaven mine, he said:

“Opening a new coal mine in the UK would send the wrong signal across the world. We are international leaders when it comes to tackling climate change. To act differently, having pledged the ending of coal, would be to surrender that leadership.”

After the decision to grant planning permission for the coalmine, the right hon. Gentleman stated that if the recommendations in his report, such as on net zero tests, were part of the process, the coalmine would have been refused. He added:

“I obviously personally believe the coal mine decision is a mistake.”

A senior Tory parliamentarian is saying the same things as us. He is against the opening of new coalmines, and by default therefore supports clause 270. On international leadership, he effectively said that by opening new coalmines, the UK can no longer claim to be world leading on climate change.

I understand the importance of the jobs that go along with coalmines. My constituency needs new jobs, but we cannot use the phrase “local jobs” to justify bad decisions. Prioritising jobs above everything else leads to a race to the bottom. We could create jobs by chopping down all the trees in the UK and burning them, but that is a ludicrous proposition, so we cannot use new jobs as a justification.

If we want to talk about jaw-dropping comments, I was surprised to find that the hon. Member for South Ribble was a Parliamentary Private Secretary to the COP26 President, the right hon. Member for Reading West (Sir Alok Sharma), so it is worth while to look at what he said about the proposals for opening new coalmines. He said:

“Over the past three years the UK has sought to persuade other nations to consign coal to history, because we are fighting to limit global warming to 1.5C and coal is the most polluting energy source…A decision to open a new coalmine would send completely the wrong message and be an own goal. This proposed new mine will have no impact on reducing energy bills or ensuring our energy security.”

Our comments were deemed jaw-dropping, but I assume that those of the COP26 President, who led the worldwide negotiations on emissions reduction, and those of the chair of the net zero review should not be regarded as jaw-dropping and should be respected.

[Alec Shelbrooke]

The hon. Gentleman said the proposals will not improve our energy security, but will he comment on what will happen to the steel industry if we are not able to produce the electricity needed to move to arc furnaces in the timeframe outlined by the clause? As I said at the end of the previous sitting, we keep identifying areas that will be powered by electricity, but we do not seem to have the ability to catch up with that. On energy security, will he comment on what will happen if we are unable to generate the electricity that the steel industry needs?

[Alan Brown]

I am happy to comment on energy security, but I remind the right hon. Gentleman that those were not my words but the words of the former COP26 President. He said that the proposed new mine will not deliver energy security. I am sure that, like me, the right hon. Gentleman respects the President of COP26 and believes that he did a good job.

This argument about supplying coke and coal to the steel industry has already been debunked: 85% of the coal from the new coalmine will go abroad, so it will not provide energy security by supporting the steel industry in the UK. That is a bogus argument.

[Alan Brown]

I want to debunk the hon. Gentleman’s debunking of the debunking. Let me come to the comments of the chair of the Climate Change Committee, Lord Deben, who the last time I checked is a Tory and was a Tory Minister.

[Alec Shelbrooke]

On that very point, will the hon. Gentleman give way?

[Alan Brown]

I am trying to answer the other point first.

[Alan Brown]

This is an important point. The chair of the Climate Change Committee condemned the opening of the new coalmine and said that opening it would mean the UK emitting 400,000 tonnes of additional carbon dioxide into the atmosphere. He also pointed out that 85% of the coal will be exported because it is high in sulphur and therefore not suitable for the UK steel industry. A former chief executive of British Steel, Ron Deelen, said:

“This is a completely unnecessary step for the British steel industry”.

[Alec Shelbrooke]

The hon. Gentleman is being exceptionally generous with his time. He said that exporting 85% of the coal does not add to our energy security, but does he accept that if we have energy at home and do not have to import it, that is energy security by definition?

[Alan Brown]

I agree, which is why I want to see more renewables deployed. That is why I keep arguing for pumped-storage hydro, but the Government have fought that. It would give us storage and additional security and resilience. Obviously, I want the UK to become a net exporter of energy overall—that is the ideal place to get to—but renewables and storage are the answer.

Plenty of other senior Tory voices are saying that we should not open coalmines, so I do not see why the SNP and Labour should not be on the side of science and of such otherwise-respected senior Tory parliamentarians. It is also ludicrous that we are still effectively banning onshore wind in England but the Government will not accept a ban on opening up new coalmines and burning fossil fuels. When we talk about trying to lead the world on energy change, that is rank hypocrisy.

I realise the reality is that the transition will use some carbon fossil fuels. We need to understand that. That is why I believe in a just transition and have tabled a new clause that asks the UK Government to follow the lead of the Scottish Government by setting up a just transition commission. I have also tabled a new clause about net zero impact assessments. That in itself should underline Government policy and make the decision-making process transparent, so that we fully understand the impacts of policy decisions on net zero.

The Minister said it was important we ensure that industries that rely on coal can rely on domestic sources of coal, but that is a vacuous comment, because any coal mined in the UK goes on the open market and to whoever pays the most money for it. Having a new UK coalmine does not mean that that coalmine will automatically supply UK-based steel makers.

--- Later in debate ---

[Alec Shelbrooke]

I do not know, but what I do know is physics. The physics says that we have to maintain a baseload. If we are unable to maintain that baseload, other options may have to be looked at, as Germany has done.

Energy Bill [ Lords ] (Twelfth sitting)

Alec Shelbrooke Excerpts

Committee stage
Tuesday 20th June 2023 Public Bill Committees

[Andrew Bowie]

I will start with the good news and first speak to clause 271 and Government new clause 52. The Government have maintained the view that Ofgem’s principal objective makes its role in achieving the net zero target clear. However, we have carefully considered the effect of clause 271 with Ofgem and sought legal advice to ensure that the Lords amendments would not impact the hierarchy and intended effect of Ofgem’s duties. We are therefore content to clarify Ofgem’s duties by making specific reference to the net zero target in the Climate Change Act 2008.

The Government new clause is equivalent in substance to clause 271, but includes some minor drafting changes to ensure that the duty works in practice. First, it clarifies the authority’s role in supporting, rather than enabling, the Government to meet their net zero target. Secondly, it clarifies the net zero targets and carbon budgets specific to sections 1 and 4 of the 2008 Act. The new clause does not change the intention of clause 271. I thank my right hon. Friend the Member for Kingswood (Chris Skidmore) for the recommendation in his report entitled “Mission Zero”, Baroness Hayman in the other place and the energy industry for working constructively with the Government to bring forward this significant change.

I now turn to clause 270, which was also added to the Bill in the Lords on Report. The clause would prohibit the opening of new coalmines and extensions to existing coalmining in Great Britain. After carefully considering this addition, I tabled my intention to oppose the clause standing part of the Bill on 17 May. The Government are committed to ensuring that unabated coal has no part to play in future power generation, which is why we are phasing it out of our electricity production by 2024. Coal’s share of our electricity generation has already declined significantly in recent years—from almost 40% in 2012 to around 2% in 2021.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Does my hon. Friend the Minister agree with me that although, as he rightly says, electricity production by coal has been as little as 1% and huge amounts of work can be done to reduce that carbon dioxide output, it is vital, with electricity generation, to maintain a baseload? As we saw recently when a gas turbine power station was turned off and we were relying on wind power, the baseload could not be maintained and the system tripped out for a large area of the country. Does the Minister agree with me that the objectives are fine, but physics and reality come in at some point?

--- Later in debate ---

[Dr Whitehead]

Is the Minister saying that we should have access to those supplies in order to back the system up? And by the way, I do not think that tripping out, which came up a little while ago, was just about coal.

[Alec Shelbrooke]

It was a gas turbine.

[Dr Whitehead]

It was a gas turbine that tripped out. It was not about coal, as far as I understand.

Is the Minister saying that we should have access to those supplies until, but not after, 2024? We will not have anywhere to burn them after 2024 because the intention is to have phased out coal by then. What exactly is the Minister saying? By the way, coal is unlikely to be burned in a UK power establishment in the future, if such establishments survive.

Energy Bill [ Lords ] (Eighth sitting)

Alec Shelbrooke Excerpts

Committee stage
Tuesday 13th June 2023 Public Bill Committees

That is significant because, first, all smart meters have “kill switches”—remote switches that can be used to disconnect homes from the national grid—and, secondly, as I said, smart meters routinely transmit a host of data that is of use in aggregate to the development of UK energy markets. I do not in any way wish to promote the Daily Mail view of smart meters as the spy under the stairs—in general, they are not, and their use is well regulated—

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

On a point of order, Mr Gray. I apologise to the hon. Member for Southampton, Test, but I want to make this point of order before the sitting concludes. We will shortly move on to discuss energy performance certificates and insulation of privately rented properties. In the past, I have been advised that I did not have to register the fact that my wife has a rental property and that her family have rental properties, but I seek your advice, Mr Gray, for the next sitting: will I have to make some sort of declaration before I comment on those areas of the Bill? I wanted to get that in now, so that a ruling can be made for this afternoon.

[The Chair]

If the interests are declared in the Register of Members’ Financial Interests and the right hon. Gentleman believes that they are relevant to the debate, it would be prudent for him to call the Committee’s attention to the register. That is not enforced entirely, but the question is whether there might be a perception of bias. Therefore, if the Member has interests that he believes might be of importance, it is probably worth his calling them to the attention of the Committee before he speaks.

Dr Whitehead, will you be concluding in the next 20 seconds?

Energy Bill [ Lords ] (Ninth sitting)

Alec Shelbrooke Excerpts

Committee stage
Tuesday 13th June 2023 Public Bill Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

On a point of order, Ms Nokes. It has come to my attention that an article published today by Politico says that the Secretary of State has

“signaled a coming U-turn on the government’s plan to put a levy on household energy bills to support the nascent hydrogen gas sector in the U.K.”

The article reports the Secretary of State as saying that

“while hydrogen was a ‘great opportunity’ for the U.K. it was ‘unlikely’ that the gas would be a major future source of domestic heating.”

Pertinent to this Committee, he said that the Government did not want to see

“a situation where a levy is penalizing people who don’t use it”

—almost the exact words that were discussed in Committee—and added that hydrogen would be

“a better bet for heavier industry”

and transport.

The Secretary of State was also reported as saying:

“We’ll look at ways to create a levy or a financing that works for everybody as best as possible”.

What I take from that is that the Government are actively looking at ways to undertake a form of levy different from the one we discussed in Committee recently. You will recall, Ms Nokes, that you had to cast the deciding vote on the relevant amendment. I am sorry that the Minister was unable to give us the information that the Secretary of State has given us in that article, in particular that the Government are actively looking at developing an alternative levy arrangement. It is more than conceivable that had that information been available to the Committee at the time, that vote may have had a different outcome. In particular, the convention of the Chairman casting the deciding vote in favour of the status quo, which you quite correctly did at that time in your position as Chair, Ms Nokes, could have meant that a vote could have been cast for a different status quo—that is, one in which the Government were actively looking

“at ways to create a levy or a financing that works for everybody as best as possible”.

The original formulation in the Bill would therefore have fallen, in effect.

Ms Nokes, do you have any guidance on how we could rectify this problem? Might we invite the Government to table a new clause, which could be discussed at the end of our deliberations on the Bill? As Chair of the Committee, would you accept a new clause later in the Bill that might allow a debate to take place in the light of the information we now have before us? It is entirely in your hands to decide, Ms Nokes.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Further to that point of order, Ms Nokes. It is great to serve under your chairmanship. I am sure the hon. Member for Southampton, Test recalls the comments that I made in the fourth sitting when I abstained on the vote. Hansard will confirm the exact language that I used, but I believe I said that the Government had said to me that they were actively looking to table an amendment on Report. The article that has been produced today ties in with the comments that I made on the record a few sittings back, and I am relieved to hear that because it shows that we are moving forward. I do not believe there is any material change in what has happened because, as I said, I was told that the Government were actively looking at making an amendment on Report.

[Dr Whitehead]

Further to that point of order, Ms Nokes. I thank the right hon. Member for Elmet and Rothwell for his point of order, which related to mine. Far be it for me to downplay his importance in proceedings but, although he is quite right, the material difference is that I was quoting what the Secretary of State said, even though the right hon. Gentleman was clearly well informed in what he said to the Committee.

--- Later in debate ---

[Dr Whitehead]

It seems rather a long time since I got through the first half of my remarks on this clause, but I am happy to continue. I will recapitulate briefly what is in the clause, and then we can move on to the next business.

Members will recall that, with amendments 160 and 161 and new clause 40—I appreciate that it will be voted on later in proceedings, not today—we are drawing attention to the possible risks attached to certain load controller activities relating to appliances that are under the authorisation of load controllers. As we have discussed, appliances that are used in smart energy networks may be able to undertake autonomous information and data transmission activities—and, indeed, activities relating to their own operation—independently of the consumer or the person who installed the device.

I previously drew attention to a company that secured a 6% or 7% share of the market in SMETS2 smart meters by putting its price 30% below the market average, thereby ensuring that energy companies have an interest in commissioning third parties to purchase and install that brand of meter. I pointed out that that company, Kaifa Technology, has very close links to—indeed, is controlled by—the state-owned China Electronics Corporation, which has been sanctioned by the United States regarding high-risk activities concerning data and electronics. Kaifa smart meters are not available for installation in the United States as a result of that sanction, yet in the UK we are apparently going ahead with no concerns whatsoever.

I am not saying that Kaifa smart meters are necessarily a source of the possible transfer-link use of data. I pointed out this morning that there are remote-switching facilities within smart meters, so it is possible that a smart meter could be switched off by an outside agency, or that its data could be transferred for not necessarily very good purposes. We have a pretty strong regulatory regime, which was recently strengthened by an information security Act. I am certainly not pointing the finger at Kaifa smart meters and saying that they are definitely not to be pursued, but we do not have any method in our current legislation—nor, indeed, in this Bill—that would enable scrutiny to be brought to bear on companies such as Kaifa in relation to national security and resilience, so that our questions can be answered. We should be as certain as possible that, should these things come to be a part of our smart energy network environment they do not, as it were, just slip in under the carpet. It should be done consciously through a review of what they mean as far as our energy security is concerned and, indeed, in respect of the security of smart energy networks.

[Alec Shelbrooke]

The hon. Gentleman is making an important point about energy security and the ability for outside players—certainly, if we consider this from a Chinese perspective—to take control. On energy security, does he share my concern about the fact that 98% of the materials used in renewable energy come directly out of China? Does that not in itself represent a similar security risk to the one he is outlining?

[Dr Whitehead]

I thank the right hon. Member for his intervention, but I do not quite share his implied view that everything that comes out of China needs to have that level of security clearance. There are concerns about the proportion of our solar panels that are made and manufactured in China, for example, and a concern that one particular country has effectively captured the market in solar panels. It would be a good idea for those purposes, not for the purposes I am talking about, to rectify that situation. China is also increasingly manufacturing components for wind turbines and various other renewables, so yes, it would be a very good idea to have a much more diverse supply chain for renewables. As far as China is concerned, that is an issue of commerce; I am talking about a potential issue of national security and resilience. Yes, it involves the same country, but there are different concerns and, indeed, concerns about other countries that may be in the same position as I outlined as far as their smart energy technology offerings are concerned.

--- Later in debate ---

These are two particular instances—in the private rented sector and two-way energy production at properties—but as we have seen the Government have effectively set out targets, ideas and aspirations in a number of other areas, and while they have not necessarily done nothing, they have not done things commensurate with the ambition. This is one case where that certainly happened in the not-too-distant past. I hope that the Committee will accept the new clauses. I appreciate that they will not be voted on until the end of our proceedings, but I hope that when we do so Members, and possibly even the Government, will decide that this is something that they would like to put in the Bill after all, and vote accordingly.

[Alec Shelbrooke]

Further to my point of order this morning about declarations of interest, I have spoken to the Commons Registrar who has informed that because I personally make no financial gain from property that my wife owns it does not have to be in the register; however, I have to declare an interest at this moment that my family has a substantial property portfolio. The comments that I am about to make, however, are based on the concerns of landlords, estate agents and letting agents in my constituency.

One of the problems is if we start to over-legislate at this time. The hon. Member for Southampton, Test pointed out that, importantly, the Government are still consulting on the report. We are in danger of focusing purely on the one area of energy efficiency in the private rented sector, and in effect making landlords do things that the owner of a private property does not have to do, with the cost being passed on to tenants. Subsection (3)(a) of new clause 41 would

“enable Local Authorities to give notice to landlords that they wish to inspect a property, requesting permissions from landlords and any tenants in situ at the time to carry out an inspection at an agreed time”.

In other words, that would enable constant inspections and attempts to move forward with insulation.

We have said throughout that we have to take the public with us on this agenda. In some areas, we move too quickly to legislate on something that the Government are consulting on and that has not been properly thought through. Several times, my hon. Friends have intervened to ask where the money is coming from to do such works. At the moment, as I look at the Bill and the £10,000 cap, it is coming from the tenant. At a time when there is a political argument on both sides of the House about how people can get on the housing ladder, increasing their rents even further because the landlord has to do something that people in the private sector do not have to do will not help that cause.

There is no doubt that energy efficiency will reduce the amount of fuel that has to be used to heat a home. That is a scientific fact. We hear that it could save £1,000 a year, but that assumes that everything stays level and that we do not have to put another levy on electricity bills. I remind colleagues that when nuclear power came along, it was said that it would be so cheap to produce that we would not be able to meter it. That turned out to be far from the truth.

[Alan Brown]

Hear, hear.

[Alec Shelbrooke]

There you go, praise from the other side.

One of the points made by the hon. Member for Southampton, Test was about getting in and retrofitting now, and not having to do it again in 2050. New clause 42(1) states:

“Within 12 months of the date on which this Act is passed, the Secretary of State must conduct a review of the “Improving Energy Performance Certificates: action plan” that sets out how new technologies can improve the energy usage and efficiency of premises.”

I have no doubt of the intent with which that was written, but it can be interpreted very differently. It could mean that as time goes forward, the regulations will change and those with band C EPCs might now be told to come to a level that was not required at this stage of retrofitting.

Energy Bill [ Lords ] (Fourth sitting)

Alec Shelbrooke Excerpts

Committee stage
Tuesday 6th June 2023 Public Bill Committees

[Dr Whitehead]

He said:

“We have to take the public with us on this—we cannot keep adding to people’s bills to try to make things work.”—[Official Report, 9 May 2023; Vol. 732, c. 276.]

That was well said, and I hope that that view will be reflected in the decisions taken by this Committee this morning.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

I thank the hon. Member for Southampton, Test for what was almost a warm-up act to introduce me to the stage. I agreed with every word: we do have to take the public with us, and a movement is building in the country against net zero and an increase in bills. There are many issues, as he has outlined.

I have good news and bad news for you, Mr Gray: I have quite a lot to say, but the hon. Member has covered a few of those things by setting out the financial implications, using some well-researched material that is available to the Committee, so I shall leave some of that aside.

One problem is that it is a little bit of lazy economics to come along with a new area of energy generation—renewable generation—and just say, “Well, we’ll add another tax to do it.” I hope to set out some alternative ways of doing it. There are some considerable potential uses of hydrogen, which I will come on to describe. If we take them in turn, they could suggest areas where the focus could be changed.

My hon. Friend the Minister is a dear friend of mine, and I will try to be gentle with him. He commented that the Bill will enable funding streams that are not yet decided. However, I say to him in all good heart that conversations in the background have opened with the comment, “Well, if we don’t do this, how are we going to pay for it?” That would suggest that decisions have already been made about the levy coming into place. I find that exceptionally disappointing, within the brief that the Minister has been given, because I do not want to see him hung out to dry.

Where I think the Minister has a very valid argument is in what he said about discussions taking place in the background. I have been led to believe that the Government are trying to work on alternatives for Report; I hope very much that that is true. The hon. Member for Southampton, Test quoted my comments on Second Reading; he will have noticed that my comments were not unique, as many colleagues on the Government Benches had similar concerns. I think that it is the view of the House, overall, that there are concerns about Government amendment 12. There is therefore an imperative on the Government to come along and find a way to make hydrogen work without a direct taxation on people’s bills.

Here is the reality. I have some figures and comments from the Library. Costs to consumers due to Government policy are known as policy costs. They consist of the renewables obligation paid on electricity bills to support large-scale renewables; the feed-in tariff paid on electricity bills to support small-scale renewables; contracts for difference paid on electricity to support low-carbon generation; the energy company obligation paid on both electricity and gas to support household energy efficiency; the warm home discount paid on both to provide a discount to vulnerable households; assistance for areas with high electricity distribution costs paid on electricity; and the green gas levy, which funds the green gas support scheme, paid on gas bills.

Based on the Q2 2023 price cap, the breakdown of annual costs annually is as follows: the renewables obligation is £80.26; the feed-in tariff is £18.70; the energy company obligation is £43.87; the warm home discount is £20.60; assistance for areas with high electricity distribution costs is £1.45; and the green gas levy is 45p. That shows that a significant number of green levies are already applied to people’s bills.

--- Later in debate ---

[Katherine Fletcher (South Ribble) (Con)]

My right hon. Friend is making a powerful case around what many of us hear on the doorstep. Does he agree that being able to define exactly what any levy would be for is a really important part of explaining something when people are fearful of their energy bills? Some have concerns about the hydrogen levy: “What hydrogen is it? Is it green hydrogen produced by wind? Is it blue hydrogen produced from carbon fossil-fuel sources with associated carbon capture and storage?” Blue hydrogen still contains some contaminants. Does he believe that “hydrogen” has been defined enough to allow us to explain things to the general public?

[Alec Shelbrooke]

My hon. Friend touches on an important point, drawing on comments made by the shadow Minister, the hon. Member for Southampton, Test. We are being asked to add a levy before we know how it will be used or what type of hydrogen it will generate. I do not think that people like signing open cheques without the way forward being defined.

I want to develop the argument for why hydrogen is an important step and to look at its applications in the automotive industry. The reason I say that is purely—

[The Chair]

Order. I am reluctant to interrupt the right hon. Gentleman, whose speeches I always greatly enjoy, but he is now launching us into a Second Reading-type debate on the benefits of hydrogen. We are discussing a very specific series of amendments, so perhaps he will return to the group under discussion.

[Alec Shelbrooke]

I am grateful, Mr Gray. What I am seeking to do is set out alternatives that can be used instead of putting the hydrogen levy in place.

[The Chair]

Order. We are discussing a Bill. It is possible to discuss the Bill itself or the amendments proposed to it; it is not possible to discuss things that are not in the Bill, even if the right hon. Gentleman thinks that they might be a good idea. Will he therefore please discuss either the Bill or the Government or other amendments in this group? He may not discuss things that are not in the Bill.

[Alec Shelbrooke]

I take your advice, Mr Gray. One tries to push one’s luck, but I take your comments on board.

To summarise the comments I was going to make, which can wait until subsequent stages, there are several alternatives within the energy market that can be used to achieve some of the things we are hoping to achieve with the blunt tool of yet another tax on energy. Hydrogen will play an important part in the energy progress that we make going forward. These things will need capital funding to help set them up, similar to many things that were done when the North sea was first exploited. Government subsidies and underwriting helped to get that under way.

These are important areas. We must not be blind to the fact that the public are losing faith in the climate agenda overall. There are many reasons why that may be happening. It may well be just algorithms on social media that draw certain people together, but we cannot be blind to the fact that there is a growing movement against net zero. There is a growing movement in this House to talk about having a referendum on whether we want to achieve net zero. Some colleagues are now pushing that forward.

We have to act carefully and diplomatically, and show people that there are huge advantages to be had from this technology and this energy going forward. The Government raise a lot of revenue off energy production, as the hon. Member for Southampton, Test and I have outlined. I therefore feel that Government amendment 12 would be a mistake. However, the Minister has indicated that work is taking place in the background, and I have had indications that amendments may be brought in on Report. If the amendment is pushed to a Division today, I shall not vote against it, but I shall abstain.

[Olivia Blake (Sheffield, Hallam) (Lab)]

It is a pleasure to follow the right hon. Member for Elmet and Rothwell. I know that this is not really a declaration of interest, but my mother, Baroness Blake, was actually the person who moved the amendment in the other place. It is interesting that mother and daughter are both working on this Bill in different ways.

Energy Bill [ Lords ] (First sitting)

Alec Shelbrooke Excerpts

Committee stage
Tuesday 23rd May 2023 Public Bill Committees

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

I thank the hon. Gentleman for giving way. I want to make a personal point: may I ask him to speak up slightly? I am hard of hearing and I am already struggling to hear what he is saying. I thank him.

[Dr Whitehead]

I appreciate that point. A moment ago, I was just making a personal aside to the Chair. I will try to address the Committee in a more expansive manner.

This group of amendments would put the full definition of carbon capture, usage and storage into the Bill. As Members know, this Bill chapter is about various activities that go on with carbon capture, usage and storage, but unaccountably the detail in the Bill talks about only carbon capture and storage. We may think that is the definition of what we are talking about, but it is not just a process of sequestering the carbon that arises from, say, a power station or cement works. Various carbon capture and storage arrangements will have to be made for the sequestering of carbon dioxide in many uses, both industrial and energy-based, throughout the country.

Then, so the story goes, that carbon dioxide is transported, by either pipe or barge, and is sequestered at a suitable site. The Secretary of State for Energy Security and Net Zero waxed lyrical recently about just how much sequestering space there is around the UK waters. His view, which I think is absolutely correct, is that the sequestration of carbon dioxide as an industrial activity in the UK, with all the preparation that goes with it, is not just a necessary feature for the end of the carbon capture and storage process but something that the UK can offer to many countries around the world for their carbon sequestration, making a substantial plus-industry for the UK out of the process.

That is the end of the carbon dioxide story—how it goes from capture, either by chemical means or by extracting it from flue gases or whatever, to being put on its journey. In my long history of engagement on carbon capture and storage, I have always said that that is the case, but a number of years ago the Government added an important rider to that process in the definition that we use: CCUS, not CCS. CCUS is important because it is not just an uninterruptable process of carbon going into the transportation and sequestration arrangements, having been captured in the first place; there are points in the process whereby the carbon can be taken out of the transportation and sequestration process. Depending on the quality of the carbon dioxide that has been captured, it can be put to secondary use, before being captured again in the process, as it goes round again.

There are considerable opportunities in making the cycle go round twice, or several times, before the sequestration takes place. That is potentially an important part of getting best value out of the carbon capture and storage process. One of the first uses of the process that I came across was quite a while ago, when I paid a visit to one of the world’s first operational carbon capture and storage plants at the Boundary dam in Saskatchewan. The energy company in Saskatchewan was capturing the carbon output from a fossil fuel energy plant and diverting the carbon that was being captured in the first instance to the process of repressurising wells in oil fields to enhance the recovery of oil. Of course, the carbon was then recaptured after that point but, importantly, that cycle had been broken and something else had happened.

That is just one use, but there are many other uses that we could think about putting carbon dioxide to. It can be used in the chemical industry in the production of methanol, in metalworking to harden the casing of moulds, or in the petroleum industry to optimise the yield of oil wells. It has a substantial use in healthcare and in horticulture. As we know from junior-school biology, plants can increase their size and output by having a carbon dioxide-rich atmosphere in which to grow, and there are substantial opportunities to use carbon dioxide under those circumstances.

Those are not significant interruptions, as it were, in the carbon-capture cycle. Indeed, the use of carbon under those circumstances is beginning—or will begin—to be programmed into the carbon capture and sequestration process. Of course, programming it in is important in terms of the arrangements being set out in the Bill for the circumstances under which licences can be granted.

We will hear a lot about licences in the passage of this Bill. As we know, certainly in the energy sphere, pretty much everything that can or cannot be done is licensed in one way or another, and there is a great deal of legislation for that purpose—for example, the Petroleum Act 1998 and the electricity and gas Acts, which set out the circumstances under which licences should be granted. Indeed, as we will see in the first part of the Bill, there is a restated imperative that people cannot carry out these things on an unlicensed basis; they really must have a licence at all stages of carbon capture—a licence to capture, a licence to transport and a licence to sequester.

The hole in the Bill is in what happens when the process is interrupted. I do not use the word “interrupted” in a derogatory sense; it is very positive that we can make the most use of carbon dioxide in its passage. Having invested a lot of money in capture, it is a good idea to try to recycle the process as much as we can, but for reasons I am not quite clear on—the Minister may be able to enlighten me—the wording of the Bill does not appear to account for that particular sphere of CCUS activity.

It may be that I have missed something and that the use of carbon should not be included in the licensing and licensable arrangements. The Government may be quite satisfied that the interruption of the process is perfectly okay to leave alone. I do not think that is the case because, as I have set out, it is part of the whole process. If we are to take carbon capture and storage seriously, we will want to know that carbon dioxide use, as part of the process, goes back into the cycle of capture and storage in the long term, and that carbon is not just captured but used for a particular purpose in the way I described. After that, it disappears back into the atmosphere, presumably to be captured again at a future date.

It is important that the licensing arrangement is complete as far as the passage of carbon is concerned. Amendments 75, 76 and 81 would add the use of carbon dioxide to the various clauses that relate to the overall process. The amendments would provide a definition of carbon capture use, and additional wording for the process of licensing and of use itself. We would not want to move the amendments separately; they are rightly marshalled together in today’s proceedings. I move the amendments together, as they are grouped in the selection list, because, as I have said, they are essentially concerned with the question of use.

I am sure the Minister will provide us with a suitably inspired reply, so that we can be reassured either that this has all been thought about, and our amendments are therefore superfluous, or that there is a problem and, whether or not he accepts the amendments this morning, the process will be looked at to ensure that we have the full definition, and the full process is in hand as far as the passage of carbon capture and storage is concerned.

--- Later in debate ---

[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.

[Alec Shelbrooke]

Will my hon. Friend describe the actual mechanisms of the carbon dioxide storage, geologically? How will that be done—for instance, will that be out into the North sea, using old oil platforms?

[The Chair]

Within the context of this amendment?

[Alec Shelbrooke]

In the context of carbon dioxide storage.

[Andrew Bowie]

I thank my right hon. Friend for his intervention. I would be happy to give a thorough explanation of exactly how the carbon capture and storage will proceed; I am sure we will get to that in the course of our debate on the Bill, and in other places. However, I am not sure where that would fit within the context of this debate, other than to say that the technology being developed by companies, organisations and clusters around the UK is world leading. When it comes to being able to store in the future the carbon dioxide being produced in the UK now, the North Sea is of course the greatest asset that we have as a country. The oil and gas industry will be able to play a pivotal role in that development as we move forward.

Given the reasoning I have set out, I hope that the amendment tabled by the hon. Member for Southampton, Test will be withdrawn.

[Dr Whitehead]

I appreciate what the Minister has said this morning. Frankly, though, I am not wholly convinced that the processes have been fully accounted for. I emphasised the various uses of carbon dioxide. The Minister is right that not all those uses lead to eventual sequestration. However, most of the uses that do not lead to additional sequestration do, on occasions, sequester the carbon dioxide in the process itself.

For example, carbon dioxide used in horticulture is substantially sequestered during the process of growing the plants. There is potentially an important use of carbon dioxide in processing hydrogen and in producing sustainable aviation fuel. Those processes sort of sequester the carbon in producing a different product, which is itself then burned. We then have to sequester the whole lot again, but the product has been used in the meantime.

It is important to concentrate on aligning the processes within carbon dioxide use as closely as possible with the process of sequestration, not simply allowing the carbon dioxide to escape. One thing that concerns me is the use of carbon dioxide in the process of the enhanced recovery of oil, because unless that carbon dioxide can be sequestered at the point it is injected into a well, although it produces greater amounts of oil it leaks into the atmosphere again, so we have a net negative outcome. We have produced more oil, but arguably it should have been left where it was in many instances.

[Alec Shelbrooke]

That leads to the question that I asked the Minister. The issues that the hon. Member for Southampton, Test is raising show that there is a research and development need for sequestration in, for instance, licensing oil and gas. That will need a large investment, so does he agree that it is important that the oil and gas industry uses some of its large profits to ensure that it can do the R&D available to sequester carbon dioxide, and does that call into question the idea of scrapping the return on profits—often criticised by the Opposition—because we need R&D to achieve this?

[The Chair]

Order. That is beyond the scope of the amendment.

--- Later in debate ---

[Dr Whitehead]

Yes, I do agree. Again, I appreciate that the wording of this Bill might be regarded as necessarily fairly vague, because of the fact that—in the words of Donald Rumsfeld—there are known knowns, known unknowns, unknown knowns and unknown unknowns about the future. However, it is important at least to have on the record something that guides us in a more positive way on who might be the “other” people affected and on indefinite exemptions and so on. It would be a good idea if that could at least be included in the discussion of the Bill.

By the way, our proceedings in Committee are of course recorded, and they are used on occasion in law to determine what the purpose of particular clauses was and what was thought to be in the mind of legislators when they introduced them. So it would be helpful, not just for our discussions today but perhaps for the future record, if the Minister was able to clarify these matters in a suitable way.

[Alec Shelbrooke]

It is a pleasure to serve under your chairmanship, Mr Gray, for what will be a long and detailed consideration of the Bill.

I want to focus on these clauses, because they provide an overall setting for the entire agenda. As the hon. Member for Southampton, Test outlined, the Bill is perhaps one of the most important pieces of legislation to come before the House in the 21st century, as we look at how we deal with these issues for the rest of the 21st century—it really is that significant.

To draw on the hon. Gentleman’s comments about unknown knowns and so on, we have to be careful at this early stage that we do not regulate to the point that we choke off innovation and research. A complaint is often made at several levels about how difficult it can sometimes be in this country for innovators and entrepreneurs to move forward without getting tied up in huge amounts of red tape. Given the global competition that exists in the field of climate change, environment and green energy, we want to have a competitive advantage.

I am sure we will discuss later areas such as tax credits and how research and development can be expanded in this industry. The Bill is so wide-reaching, across so many Departments—indeed, you might rule us out of order as we consider it, Mr Gray—that I expect to be told once or twice that some provision is not the responsibility of the Minister. The Bill ties up so many areas of Government, including the Department for Business and Trade, the Treasury and the responsibilities of the Minister.

Therefore it is important that we do not try to license every possible outcome that we may consider at this stage. That would delay the process. Often, it is important to allow a Minister to make a reasonably quick decision as something comes to the fore, whether through secondary legislation or a delegated decision. If we look at America’s Inflation Reduction Act or the EU’s response to it, we know that we are in a highly competitive, subsidised market. I do not believe in the heavy subsidisation of companies; I believe in being able to exploit their intellectual capability to be innovative, to be world leading and to get things to market as quickly as possible. Having said that, later clauses of the Bill concern things, such as battery storage, about which I have great concerns and on which we probably need a bit more legislation. That is one of those areas that may well fall under a different Department, but it will be important to raise those issues in the context of the Bill.

I understand the desire to say, “We must try to use the Bill to offset any health and safety concerns that may come along, because we are in such a new technological area.” But when we look at the granting of licences in this part of the Bill, we would not want to choke off the innovators for which this country is well regarded in so many countries around the world. We are an innovative nation. We have the lead on innovation. China steals IT and reduces the cost of producing materials through poor wages and a disregard for health and safety, but it is not an innovator, which is what our universities and sectors work so well towards being.

The hon. Member for Sheffield, Hallam mentioned that she had spoken to the institutions in her great city. In a previous life, when I worked for the University of Leeds, I was involved in the early days of nanotech. We joined up all our seven major universities, including the universities in the hon. Lady’s city, and that accelerated Yorkshire’s ability to lead in nanotechnology. We could do that because we could draw those things together, bring the expertise together and accelerate it. Innovation hubs formed out of those universities in the early 2000s and gave us a leading edge, which we have used.

As legislators, we must try to ensure that we provide a framework for companies, innovators and researchers to work within. But that should not be prescribed in such a way that, when a product is ready to take to market, needs extra investment or needs to be able to work elsewhere, we have put a very tight pair of handcuffs on the ability to do those things. The premise of the Bill gives direction, but my hon. Friend the Minister should not make it so tight that we choke off the very things that we are trying to do.

We all talk about the huge potential investment in the green economy, about the green investment bank and about the massive changes that have taken place in the Treasury in recent years. Of course, we talk about having a smooth transition when there is a potential change of Government. That is why the Bill is so important and why I pushed to be on this Committee. The Bill is a major change that will stand this country—and indeed the world, if we can export some of the technology—in good stead in terms of achieving the better society we are trying to achieve on climate change. It is important that we go down this road, but let us not make the provisions so restrictive that we choke off the innovation at which this country excels.

Energy Bill [ Lords ] (Second sitting)

Alec Shelbrooke Excerpts

Committee stage
Tuesday 23rd May 2023 Public Bill Committees

[Andrew Bowie]

Clauses 13 to 15 relate to the modification of licences for carbon dioxide transport and storage.

Clause 13 enables the economic regulator to modify the conditions of a licence after it has been granted. That is to ensure that licence conditions can keep pace with the evolution of the market. It also enables the economic regulator to undertake periodic reviews of the amount of allowed revenue an operator can receive, which will then be set out in the licence. In economically regulated sectors, price controls are a method of setting the amount of allowed revenue that can be earned by network companies over the length of a given period. Regulated companies then recover their allowed revenues through the charges they set.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Does my hon. Friend agree that clause 13 is about precisely what I was touching on earlier? It is important to have the flexibility in the legislation to adapt as technology and innovation adapt too.

[Andrew Bowie]

Yes, I agree with my right hon. Friend. It is precisely about what he was touching on earlier: we are able to provide in the legislation the flexibility to allow the technologies for which we are legislating the space to grow, develop and become commercially viable. That is why it is essential to strike the balance between regulation and ensuring freedom for companies to operate. That is exactly why we would like the clause to stand part of the Bill.

As I was saying, allowed revenues must be set at a level that covers the companies’ costs and allows them to earn a reasonable return, subject to their delivering value for consumers, behaving efficiently and achieving their targets as set by the economic regulator. The amount of allowed revenue that an operator is able earn is set out in the licence conditions, which will need to be updated to reflect the outcomes of the periodic regulatory reviews and to keep pace with the evolution of the market more broadly. The power provides for the economic regulator to make such licence modifications, subject to an appropriate consultation process.

Before making any modifications to licence conditions, the economic regulator must give notice of the proposed modifications, the rationale for them, and an appropriate timeframe within which representations may be made. Any representations that are made must be duly considered. As Exchequer support will be available to certain users of the networks, the Secretary of State must be consulted on licence modification proposals and retains the power to direct that a modification may not be made.

Should the Secretary of State object to a particular modification, the economic regulator would need to consider whether to pursue the modification in an alternative form, which would require restarting the process of notifying and consulting on the new proposals. As is the case in other regulated sectors, licensees should have the right of appeal regarding modifications that are made to licences after they have been granted. The Bill provides for that later in chapter 1.

Clause 14 requires that, where the economic regulator has made a licence modification under clause 13 to a standard licence condition, the standard conditions of all future licences of that type should similarly be modified. That ensures a consistent approach to standard conditions across licences of the same type.

Clause 15 makes provisions for the Competition and Markets Authority or, as may be the case, the Secretary of State, to modify licence conditions in specific circumstances in relation to company mergers. Where there is a merger between licensed entities, that may necessitate licence modifications to ensure compliance with competition law. The power enables the CMA or the Secretary of State to modify licence conditions accordingly. I commend the clauses to the Committee.

Energy Bill [Lords]

Alec Shelbrooke Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[Grant Shapps]

Again, I will make a little progress before I take the next set of interventions.

Offshore wind provides a secure and resilient source of energy, and we are already global leaders in offshore wind, with the world’s largest wind farm in the North sea. We also have the world’s second largest wind farm and the third largest. The fourth largest is being constructed now at Dogger Bank, and that will become the largest in the world. In other words, we have become global experts in delivering offshore wind, and that is why this country is now selling that technology and expertise elsewhere in the world. It is also why we have a leadership role in offshore floating platforms; we have both the first and the largest such platform in the world. We are also introducing reforms to assist with security at civil nuclear sites, and we are ensuring that offshore oil and gas regulatory regimes protect habitats as new technologies are developed.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

I want to bring my right hon. Friend back to his comments about energy security. The Bill outlines lots of ways in which that will be achieved, but he will be aware that the vast majority of materials needed for renewable energy are processed in China. Are we not therefore in danger of creating the same situation with renewables as we had with fossil fuels and Russia, and what assessment has he made of energy security in those particular areas?

[Grant Shapps]

I very much share my right hon. Friend’s concerns. I was recently at the G7 in Japan, where we signed an agreement with other nuclear powers from the G7 on exactly this issue of energy security. Of course, we have Urenco—a third owned by the British Government—which is in many ways very advanced on the production, fabrication and other elements of uranium. It is part of the mix and we must ensure we are able to do that, so I thank him for his question.

--- Later in debate ---

[George Eustice (Camborne and Redruth) (Con)]

This is a large and technical Bill that sets in place important frameworks, particularly when it comes to carbon capture and storage and the wider deployment of hydrogen and heat networks. I will address my comments, in the time that I have today, to part 3 of the Bill, particularly the support for low-carbon heating schemes and the opportunity that this provides for doing something creative for the off-gas grid homes in this country. It links to the earlier intervention of the hon. Member for Strangford (Jim Shannon) and to a private Member’s Bill that I introduced at the beginning of this year.

At the moment, we have 1.7 million homes in this country that are currently off the gas grid, most of which use kerosene at the moment. Under the current Government plan, which is born out of a strategy that dates all the way back to 2017—several Governments ago—the intention is that all those 1.7 million homes would be banned from having a replacement boiler after 2026 and told that, instead, they must have, effectively, either an air source heat pump or a ground source heat pump. As the right hon. Member for Leeds Central (Hilary Benn) said, there is a role for those heat pumps, but they are not for every home. In particular, in rural and especially coastal areas, air source heat pumps can be prone to rusting and decay. It is also the case that they need a lot of insulation to make them work, and, in some older homes, high levels of insulation mean less ventilation, which can lead to problems with damp, mould and all of the health problems that go with that.

Perhaps, more important than anything, the capital cost of these air source or ground source heat pumps for a single property is around four times that of a conventional boiler.

[Alec Shelbrooke]

My right hon. Friend touches on a point that I was going to raise later. My concern about the banning of gas boilers from 2024 is the impact that that will have on industry and on farming in particular, especially in relation to those costs. Farming is under a lot of pressure at the moment. Does he agree that this is similar to the argument that he is making about households in 2026?

[George Eustice]

My right hon. Friend makes an important point. As the right hon. Member for Leeds Central said, we need a diversity of different technologies because it is essential that we have all the tools in the box to achieve our objectives.

There is also a wider problem with the current Government strategy. Just before we get to 2026, we can envisage plumbers and boiler engineers across the land going out to people and saying, “If I were you, I would get a new boiler now because the drawbridge is about to come up.” That will probably mean that we will have a surge of investment in boilers at just the wrong time. On top of that, there is likely to be a “mend and make do” approach that will stretch for many years. All of this means that the objective of making carbon reductions, and getting not just to net zero but to our objectives under carbon budget 5, gets potentially further away, rather than closer.

The good news is that there is a better way. In recent years, the technology and supply of renewable liquid fuels have developed. If we were to use renewable liquid fuels such as hydrotreated vegetable oil, there is a great opportunity for us to get an 88% reduction in our carbon emissions, but far faster than the current Government strategy. It could get us an 88% reduction by carbon budget 5 simply by having an adaptation of those existing boilers.

A pilot in my own constituency has been testing hydrotreated vegetable oil. Residents who have used it report that it burns more efficiently. Some say that the use of the fuel is around 30% lower than with kerosene. The people at the church hall like it because they need intermittent heat, and they can switch it on without having a heat pump running continuously, wasting all that energy. The staff at the school like it because it works for their Victorian building. There is a huge amount to be said for opening the door to the deployment of these renewable liquid fuels. The Government already recognise this, because the renewable transport fuel obligation, introduced in 2007, creates an incentive scheme to require both importers and refiners of fuel to source some of that from renewable sources, such as hydrotreated vegetable oil. The Bill is an opportunity to extend the architecture of the RTFO, a long-standing scheme, to domestic boilers as well so that we can have that incentive.

I know that some officials in the Department argue that we cannot be certain that hydrotreated vegetable oil comes from renewable sources. I do not accept that. There is a British standard—an accreditation scheme for HVO that comes from renewable sources. It would be very easy for the Government, through regulation, to insist that only British standard-certified HVO would be allowed for this purpose. The officials have also raised questions about the supply of renewable HVO, but we are seeing an exponential rise in supply both from the United States and from the European Union and the potential to develop it in this country as well.

I very much hope that the Government will look favourably on amending the Bill—clause 104 of part 3 of the Bill would be key—preferably with their own amendment to give respite to 1.7 million homes in rural locations. If not, I shall seek, if I have the support of the House, to amend the Bill. My private Member’s Bill attracted huge support not just from Conservative Members, but from Members across the House, and the Government should consider it.

--- Later in debate ---

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

In the short time I have, I will focus my comments on vehicle propulsion, but first I draw on the comments from my right hon. Friend the Member for Camborne and Redruth (George Eustice) and the right hon. Member for Leeds Central (Hilary Benn) that the cost we pass on to the public must be minimised. I hope the Minister will take note of the points about the hydrogen levy before Committee stage. It is misguided and it is in the wrong place. We have to take the public with us on this—we cannot keep adding to people’s bills to try to make things work. I hope the Minister will take that point away.

Much has been said about energy security and trying to get away from the situations we face with Russian gas, fossil fuels and so on, but I am concerned that we are moving into another area of energy dependence on another autocracy or dictatorship, China. I raised this point with the Secretary of State earlier, and he focused on uranium, but that was not what I was getting at. China has sucked up the processing of many of the materials in the world that are needed to make renewable energy. According to statistics put forward by Morgan Stanley, China refines 59% of the world’s lithium, 80% of the cobalt, 69% of nickel sulphate, 95% of magnesium, 100% of spherical graphite, 69% of synthetic graphite, as well as producing 70% of battery cells, 78% of cathodes and 91% of anodes.

To build on that, the Mercator Institute for China Studies, a German think-tank, says about nickel processing in Indonesia:

“In 2014, Indonesia banned the export of unprocessed nickel, prompting a wave of Chinese investments seeking to secure battery materials. With China’s help, Indonesia plans to boost its share of global nickel production from 28 to 60 percent… Already several multi-billion USD nickel-focused industrial parks are sponsored by Chinese companies.”

On cobalt in the Democratic Republic of Congo, MERICS states:

“The DRC is home to over half of the world’s cobalt reserves and was responsible for two-thirds of mined output production in 2020. Chinese companies control up to 70 percent of the Congolese mining portfolio, but mining contracts…are under review by the DRC.”

MERICS also comments on the Lithium Triangle,

“a region around the borders of Argentina, Bolivia and Chile. It is thought to hold around half of the world’s lithium reserves. Between September and November 2021 alone, four separate Chinese companies announced acquisitions cumulatively worth USD 1.2 billion.”

That is the reality we live in today. A parallel can easily be drawn to what a hostage to fortune it could be if an autocracy or dictatorship took a direction we were not happy with. We have seen that happen in terms of fossil fuels with Russia.

So what do we do about it? The Bill makes some progress here, but I think we must come up with another technology that can work alongside electric vehicles. I want to draw attention to the fact that we do not put enough energy into hydrogen combustion. There is a lot of research going on. I am a big motorsport fan and I have been taking the magazine “Autosport” for over 30 years, so I will quote from its engineering supplement on 16 March 2023:

“‘People think hydrogen infrastructure is complicated and it doesn’t have to be if you look at it in stages,’ reckons Cosworth CEO Hal Reisinger, his company one of many including ORECA to have invested in hydrogen test cells. ‘Internal combustion engines can be very easily converted to hydrogen; put different injectors in, remap the ECU and there’s this entire infrastructure of engines that are available. It’s much easier to establish a hydrogen infrastructure than an electric infrastructure.’”

There are indeed great demands coming if we want to achieve the target number of electric vehicles. By the Government’s own estimate, the global demand for electric vehicle battery materials is projected to increase by between six and 13 times by 2040 under stated policy. World copper production has to double to be able to meet production policy, yet there was a report only last week that not enough new mines are being exploited to reach the current copper production level.

Hydrogen combustion does have issues. The compression of the hydrogen has to be 700 bar. There are questions about how we manufacture and store it. If we get the technology wrong. it produces dangerous levels of nitrogen oxide. That will have to be addressed, and so will the weight.

However, my argument is that there is an alternative that technically can work. I know that other companies, including JCB, have done a lot of research into it. I urge the Minister, when we are looking at development budgets, to start to put some hydrogen combustion development in there. We could refocus the automotive transformation fund, which perhaps has been too focused on electric vehicles and needs to look at other areas. There is a geopolitical and geostrategic effect that is occurring after some of these policies have been written, and we must be able to adapt and move along.

Every hon. Member in this Chamber wants to move towards a net zero society, but if we do not do so sustainably, taking the public with us, we will find that harder and harder to do, as my right hon. Friend the Member for Camborne and Redruth outlined with regard to the buying of gas boilers making the situation worse. Recognising that the supply of the rare earth elements that are needed may provide hostages to fortune with countries such as China, I urge my hon. Friend the Minister to look into how the Government can help companies to research and develop hydrogen combustion.

--- Later in debate ---

[Dame Maria Miller (Basingstoke) (Con)]

It is a pleasure to see you in the Chair, Madam Deputy Speaker. I rise to support the Bill. I was hoping to hear from the hon. Member for Brighton, Pavilion (Caroline Lucas) a few more of the positive things that this Government have achieved, which are important to acknowledge, so that people can see that progress has been made, not least the fact that half of all our electricity is now generated from renewable energy sources—something we could be forgiven for missing in her speech.

I do not want to repeat what has been said in the debate, much of which I agree with, but I want to bring up two particular issues that I hope the Minister will take note of: fusion power and lithium-ion storage facilities. He will not be surprised by that. They both illustrate the ingenuity of our scientists and the fact that, as our understanding of new energy sources develops, the Government’s response to those energy sources needs to develop and those technologies need different regulation.

Let us take fusion technology first. Last year I visited General Fusion in Vancouver, British Columbia, an incredible Canadian firm working with the Culham Science Centre in Oxfordshire, which will be the home to the firm’s fusion testbed. We should be very proud of that. The Bill fundamentally changes the way in which fusion technology is regulated in the UK, because we understand it much more now. The current regulatory regime characterises fusion in the same way as nuclear, which is just plain wrong. To better recognise the fusion process, the Government are rightly introducing measures in clause 110 to remove fusion from nuclear site licensing requirements. That is very welcome. It is more accurate. It provides confidence to investors, the industry and the public alike, and it is an example of how the Government are recognising the need for regulatory changes.

That is in contrast with the issues around lithium-ion battery storage facilities, which are covered in clause 168—the Minister knows where I am going next. For the first time, the Bill recognises that electricity storage is separate from electricity generation. It is a new sector. In the past, power stations were designed to match consumer demand. With around half of our electricity now generated by wind, it is essential to store electricity to help out when the wind is not blowing, to put it plainly. Over 90% of our UK electricity storage capacity is in lithium-ion batteries, and while recognising energy storage, the Bill is silent on issues that are fundamental to the future of this sector, including fire safety.

[Alec Shelbrooke]

Does my right hon. Friend agree that a lot more research needs to be done on where these storage facilities are based? Thermal runaway can cause fires that take several days to put out, and some of the chemicals used to extinguish those fires are toxic. There are planning applications coming forward for facilities that are far too close to people’s homes.

[Dame Maria Miller]

My right hon. Friend is right that there are hundreds of applications coming forward in around 350 constituencies, and I urge Members to check whether any such applications have been made in their patch.

I would like to draw on a slightly different issue, which is that if we do not have the right regulation for lithium-ion battery storage, we will not attract investment into this area in the future, because we will not be encouraging those lithium-ion battery storage facilities to be designed in a way that mitigates the risks we know exist. At the moment, the planning application process takes no account of the proven fire risks that my right hon. Friend just referred to with lithium-ion battery storage plants. Thermal runaway is a chemical reaction caused by overcharging or a design fault, and these fires cannot just be put out; they can only be stopped by cooling with large amounts of water over several days, which creates toxic fumes and polluted water runoff. Even though the use of batteries for this purpose is relatively new and there are currently only 35 such facilities in action, we have already had one major fire in Merseyside in 2019 that took 59 hours to put out.

This new technology is being rolled out at lightning speed, with 473 new sites under way, yet there is still no planning guidance for local authorities, no requirement to obtain an environmental permit from the Environment Agency and no requirement for the fire service to be consulted over designs or locations. The Bill must directly address that gap in regulation. Since I raised the problem with Ministers in July last year, and following a roundtable with five Departments in March, there now appears to be agreement that regulatory change needs to be considered. This Bill is exactly where it needs to be addressed, and I am happy to table amendments to that effect if the Government are not able to do so themselves.

In an open letter to all Hampshire council leaders, Neil Odin, who is the fire chief of the Hampshire and Isle of Wight Fire and Rescue Service, stated that these batteries

“can malfunction and lead to an intense fire, and when they do, pose a significant harm to the environment”.

That is coming from the head of one of the largest fire authorities in the country. I believe they also pose a significant risk to people, including firefighters, and I hope that in advance of Report the Minister will work with me to amend the Bill, so that lithium-ion battery storage can continue to play a hugely important role in realising the Government’s ambitions but with the right regulatory governance in place, not only to ensure the safety of our residents but to encourage insurance companies and those who want to run these facilities to do so in the future.