Energy Bill [Lords]

Andrew Bowie Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

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

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

Government new clause 63—Renewable liquid heating fuel obligations.

Government new clause 64—Regulations under section 92(1): procedure with devolved authorities.

Government new clause 65—Regulations made by Secretary of State: consultation with devolved authorities.

Government new clause 66—Regulations under section 292 and 293: procedure with devolved authorities.

New clause 1—Community benefits relating to onshore wind farms—

“(1) Within six months of the date on which this Act is passed, the Secretary of State must prepare and lay before Parliament a report setting out proposals for ensuring that local communities benefit from onshore wind farms.

(2) The report under subsection (1) must set out, but is not limited to, proposals for—

(a) 5% of the gross revenue of new wind farm, solar, hydro and other renewable developments generating over 1MW to be paid into community benefit funds;

(b) widening the distance of communities around new renewable developments which receive shares of community benefit funds, with the aim of limiting the wealth disparity amongst rural communities; and

(c) ensuring that communities surrounding wind farms have a statutory right to benefit from local renewable energy development.”

New clause 2—Prohibition of new coal mines—

“(1) Within six months of the day on which this Act is passed, the Secretary of State must by regulations prohibit the opening of new coal mines and the licensing of new coal mines by the Coal Authority or its successors.

(2) Regulations under this section are subject to the affirmative procedure.”

New clause 3—Prohibition of energy production from coal—

“(1) The Secretary of State must by regulations provide for the UK to cease energy production from coal from 1 January 2025.

(2) Regulations under this section may amend primary legislation (including this Act).”

New clause 4—Flaring and venting—

“(1) The Energy Act 1976 is amended as follows.

(2) In section 12, after subsection (5), insert—

“(6) The Secretary of State may not grant consent under this section after 1 January 2025; and any consent granted under this section ceases to have effect from 1 January 2025.

(7) Paragraph (3)(a) of this section ceases to have effect from 1 January 2025.”

(3) In section 12A, after subsection (5), insert—

“(6) The OGA may not grant consent under this section after 1 January 2025; and any consent granted under this section ceases to have effect from 1 January 2025.””

This new clause is intended to ban flaring and venting of natural gas after 1 January 2025.

New clause 5—Date of cessation of issuing of oil and gas exploration and production licences—

“(1) Within three months of the day on which this Act is passed, the Secretary of State must establish an independent body to advise on the date after which no new licences for oil and gas exploration and production should be issued.

(2) The body must make its recommendation to the Secretary of State not later than three months after the day on which it is established.

(3) Not less than three months after the date on which the Secretary of State receives the body’s recommendation, the Secretary of State must present to Parliament legislative proposals to give effect to the recommendation.”

New clause 6—Net zero power supply—

“(1) It is the duty of the Secretary of State to ensure that the aggregate amount of net emissions of carbon dioxide and net emissions of each of the other targeted greenhouse gases associated with the supply of power in the UK in 2035 is zero.

(2) The Secretary of State must by regulations provide for the means of calculation of net emissions of carbon dioxide and of each of the other targeted greenhouse gases for the purposes of subsection (1).

(3) The means of calculation provided for in regulations under subsection (2) must be consistent with the means of calculation of the net UK carbon account for the purposes of section 1 of the Climate Change Act 2008.

(4) For the purposes of this section a “targeted greenhouse gas” has the same meaning as given in section 24 of the Climate Change Act 2008.”

This new clause is intended to provide for the UK’s power supply to be net zero by 2035.

New clause 7—Energy Charter Treaty—

“Within six months of the day on which this Act is passed, the Secretary of State must initiate procedures for the United Kingdom to withdraw from the Energy Charter Treaty.”

New clause 8—Community and Smaller-scale Electricity Export Guarantee Scheme—

“(1) Within six months of the passing of this Act, the Secretary of State must by regulations require licensed energy suppliers with more than 150,000 customers (“eligible licensed suppliers”) to purchase electricity exports from sites including those operated by community groups, that generate low carbon electricity with a capacity below 5MW.

(2) Fossil fuelled local power plants with a capacity of less than 5MW are not eligible for participation in the Community and Smaller-scale Electricity Export Guarantee Scheme, with the exception of a local combined heat and power plant that generates electricity ancillary to its purpose of providing heat for local heat networks.

(3) “Fossil fuel” has the meaning given in section 104(4).

(4) Licensed energy suppliers with fewer than 150,000 customers may also purchase electricity exports from the sites defined above provided that they do so on the terms set out by the regulations.

(5) The regulations must require that eligible licensed suppliers—

(a) offer to those sites a minimum export price set annually by the Gas and Electricity Markets Authority (“GEMA”),

(b) offer to those sites a minimum contract period of five years, and

(c) allow the exporting site to end the contract after no more than one year.

(6) Within six months of the passing of this Act, GEMA must—

(a) set an annual minimum export price for those sites that has regard to current wholesale energy prices and inflation in energy prices and the wider economy,

(b) introduce a registration system for exporting sites meeting the requirements set out in subsection (1) and wanting to access these export purchases,

(c) define specifications for the smart export meters required by such sites,

(d) define “low carbon electricity” in such a way that it includes renewable generation technology and may include other technology with extremely low carbon dioxide emissions,

(e) define requirements for an exporting site generating low carbon electricity with a capacity of less than 5MW to be registered as a Community or Smaller-scale Energy site, and maintain a register of such sites.

(7) To access the export purchase agreements defined in this section exporters must—

(a) register their site with GEMA,

(b) install a smart export meter that meets specifications defined by GEMA, and

(c) notify GEMA if their ownership structure meets the definition of a Community or Smaller-scale Energy site.

(8) All licensed suppliers providing such purchase agreements must report annually to GEMA—

(a) the number and capacity of Community or Smaller-scale Energy sites that have been offered contracts to purchase electricity and the number of these that agreed those contracts,

(b) the total amount of electricity purchased under these agreements, and

(c) the price paid for that electricity.

(9) OFGEM must make and publish a report annually on the operation of the export purchase agreements, setting out—

(a) the number of Community or Smaller-scale Energy sites contracted with licensed energy suppliers under this section and the total amount of electricity purchased,

(b) the licensed suppliers contracting with Community or Smaller-scale Energy sites and the amount of electricity each has purchased,

(c) an assessment of how the mechanism is performing and the contribution it is making to delivering secure and low carbon electricity supplies, and

(d) recommendations on how the mechanism could be improved.

(10) Regulations under this section are subject to the affirmative procedure.”

New clause 9—Community and Smaller-scale Electricity Supplier Services Scheme—

“(1) Within six months of the passing of this Act, the Secretary of State must by regulations require licensed energy suppliers with more than 150,000 customers (“eligible licensed suppliers”) to offer a Community and Smaller-scale Electricity Supplier Service agreement to any registered Community or Smaller-scale Energy site under section (Community and Smaller-scale Electricity Export Guarantee Scheme) for the purposes of allowing that site to sell electricity to local consumers.

(2) The Community and Smaller-scale Electricity Supplier Service agreement will require licensed suppliers to make a community or smaller-scale energy tariff available to consumers local to the exporting site that has regard to the export price paid or that would be paid to that site under section (Community and Smaller-scale Electricity Export Guarantee Scheme).

(3) The eligible licensed supplier may limit the total number of consumers the community or smaller-scale energy tariff is available to such that the total annual energy sold under the tariff is broadly equivalent to the total annual energy generated by the site.

(4) The eligible licensed supplier will be the registrant for the meters of any local consumer purchasing energy under the community or smaller-scale energy tariff.

(5) The eligible licensed supplier may charge a reasonable fee for the provision of services under this section provided that it has regard to distribution, licensing and regulatory costs and any guidance provided by GEMA.

(6) The eligible licensed supplier must return any money raised through the sale of energy under a tariff set up under this section to the Community or Smaller-scale Energy site, save for the fee allowed under subsection (5).

(7) Eligible licensed suppliers must report annually to GEMA on—

(a) the number and capacity of community energy groups or smaller-scale sites offered Community and Smaller-scale Electricity Supplier Service agreements and the number who have contracted to use them,

(b) the total amount of electricity purchased under these agreements, and

(c) the tariffs for each agreement.

(8) GEMA must—

(a) produce guidance on the level of community or smaller-scale energy tariffs and on the reasonable charges that eligible suppliers may charge for Community and Smaller-scale Electricity Supplier Service Agreements,

(b) make and publish a report annually on the operation of the export purchase agreements, setting out—

(i) the number of community energy projects or smaller-scale sites contracted with licensed energy suppliers under this section and the total amount of electricity purchased,

(ii) the licensed suppliers contracting with community energy groups or smaller-scale sites and the amount of electricity each has purchased,

(iii) an assessment of how the mechanism is performing and the contribution it is making to delivering secure and low carbon electricity supplies, and

(iv) recommendations for how Community and Smaller-scale Electricity Supplier Service agreements could be improved.

(9) Regulations under this section are subject to the affirmative procedure.”

New clause 11—Enhancing rewards for solar panels—

“Within six months of the day on which this Act is passed, the Secretary of State must prepare and lay before Parliament a report on enhancing the reward under the Smart Export Guarantee for customers who install solar panels.”

This new clause seeks to enhance the reward under the Smart Export Guarantee for energy customers who install solar panels.

New clause 12—Prohibition on flaring and venting and enhanced measures to reduce fugitive methane emissions—

“(1) The Secretary of State must by regulations—

(a) prohibit the practice of flaring and venting by oil and gas installations other than in an emergency within the jurisdiction of the United Kingdom,

(b) require monthly leak detection and repair inspections to reduce fugitive methane emissions,

(c) require a measurement, reporting and verification process to quantify methane emissions, and

(d) require the upgrade of all equipment to alternative zero- or low-emission and low-maintenance equipment, such as electric, mechanical, or compressed air equipment.

(2) In this section—

“flaring” means the burning of methane gas and other hydrocarbons produced during oil and gas extraction;

“venting” means the release of methane gas and other hydrocarbons directly into the atmosphere, without combustion.

(3) Regulations under this section must be made so as to come into force by 31 December 2025.”

This new clause would prohibit “flaring” and “venting”.

New clause 13—Introduction of a social tariff for vulnerable energy customers—

“(1) Within six months of the day on which this Act is passed, the Secretary of State must prepare and lay before Parliament a plan to bring forward a social tariff for vulnerable energy customers.

(2) The plan under subsection (1) must set out ways in which the social tariff for energy would satisfy the following conditions—

(a) it is additional to the Warm Home Discount and Default tariff price Cap,

(b) it is mandatory for all licensed electricity and gas suppliers,

(c) it is targeted at households that are in or at risk of fuel poverty,

(d) it is set at a level that is below the market price, and

(e) it automatically enrols eligible households onto the tariff.”

This new clause will require the Secretary of State to bring forward a plan to introduce a social tariff for energy.

New clause 14—Smart meter roll-out for prepayment customers—

“(1) The Secretary of State must ensure that all legacy prepayment meters are replaced with smart meters before the end of 2025.

(2) Within three months of the day on which this Act is passed, the Secretary of State must prepare a plan to end self-disconnections by the end of 2026.

(3) Such a plan may include but is not limited to—

(a) the introduction of a social tariff for prepayment customers,

(b) the introduction of mechanisms to apply credit automatically if a prepayment customer runs out of credit,

(c) the introduction of a mechanism to transfer a prepayment customer to credit mode automatically if they run out of credit.”

This new clause places duties on the Secretary of State to ensure prepayment metered customers are prioritised in the smart meter rollout, and to create a plan to stop self-disconnections before the end of 2026.

New clause 15—Restriction of the use of prepayment meters—

“(1) Within 90 days of the day on which this Act is passed the Secretary of State must make regulations prohibiting energy suppliers from authorising or undertaking the installation of new prepayment meters for domestic energy use unless the condition in subsection (2) is met.

(2) The condition is that the energy supplier has received an explicit request from the consumer for the installation of a prepayment meter.

(3) In this section “installation of new prepayment meters” includes switching existing energy meters to a prepayment mode.

(4) The Secretary of State may make subsequent regulations that amend or repeal regulations made under this section.

(5) Regulations under this section are subject to the affirmative procedure.”

This new clause would require the Secretary of State to prohibit the installation of new prepayment meters unless consumers explicitly request them.

New clause 16—National Warmer Homes and Businesses Action Plan—

“(1) The Secretary of State must, before the end of the period of 6 months beginning with the day on which this Act is passed, publish an action plan entitled the Warmer Homes and Businesses Action Plan, to set out proposals for delivery of—

(a) a low-carbon heat target, of 100% of installations of relevant heating appliances and connections to relevant heat networks by 2035,

(b) an Energy Performance Certificate at band C by 2035 in all UK homes where practical, cost effective and affordable, and

(c) an Energy Performance Certificate at band B by 2028 in all non-domestic properties, and

(d) the Future Homes Standard for all new builds in England by 2025.

(2) The Secretary of State must, in developing the Warmer Homes and Businesses Action Plan, consult the Climate Change Committee and its sub-committee on adaptation.”

This new clause imposes a duty on the Secretary of State to bring forward a plan with time-bound proposals for low carbon heat, energy efficient homes and non-domestic properties and higher standards on new homes.

New clause 17—Plan for vulnerable consumers—

“(1) Within three months of the day on which this Act is passed, the Secretary of State must prepare and lay before Parliament a plan addressing the needs of vulnerable consumers and consumers from low-income households in relation to the cost of energy.

(2) The plan under subsection (1) may include, but is not limited to—

(a) the extension of the energy price cap on heating oil,

(b) the extension of the warm homes discount,

(c) the increase of winter fuel payments,

(d) preventing electricity suppliers from recovering the costs of paying a revenue collection counterparty under the Nuclear Energy (Financing) Act 2022 from customers claiming Universal Credit or other legacy benefits,

(e) requirements for energy suppliers to offer social energy tariffs to households experiencing fuel poverty, and

(f) any other measures the Secretary of State believes are appropriate.”

This new clause would require the Secretary of State to develop a plan to protect vulnerable customers from the rising cost of energy.

New clause 18—Energy performance regulations relating to existing premises—

“(1) Within six months of the day on which this Act is passed, the Secretary of State must make regulations—

(a) to amend the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (S.I. 2015/962) to require that, subject to subsection (2), all tenancies have an Energy Performance Certificate (EPC) of at least Band C by 31 December 2028; and

(b) to amend the Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2019 (S.I. 2019/595) to raise the cost cap to £10,000.

(2) Regulations under subsection (1) must provide for exemptions to apply where—

(a) the occupier of any premises whose permission is needed to carry out works refuses to give such permission;

(b) it is not technically feasible to improve the energy performance of the premises to the level of EPC Band C; or

(c) another exemption specified in the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 has been registered in the Private Rented Sector (PRS) Exemptions Register.

(3) Within six months of the passage of this Act the Secretary of State must make regulations—

(a) to amend the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 to enable local authorities to give notice to landlords that they wish to inspect a property in relation to those Regulations, requesting permissions from landlords and any tenants in situ at the time to carry out an inspection at an agreed time;

(b) to expand the scope of the current PRS Exemptions Register and redesign it as a database covering properties’ compliance with or exemptions from EPCs;

(c) to require a post-improvement EPC to be undertaken to demonstrate compliance;

(d) to require a valid EPC be in place at all times while a property is let; and

(e) to raise the maximum total of financial penalties to be imposed by a local authority on a landlord of a domestic private rented sector property in relation to the same breach and for the same property to £30,000 per property and per breach of the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.

(4) The Secretary of State may make regulations—

(a) to enable tenants in the private rented sector to request that energy performance improvements are carried out where a property is in breach of the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015; and

(b) to make provision for a compensation mechanism where a tenant is paying higher energy bills as a result of a property not meeting the required standard.

(5) Regulations under this section are subject to the affirmative procedure.”

This new clause seeks to improve the energy efficiency of private rental properties for tenants and gives powers to local authorities to conduct assessments of the energy efficiency of private rental properties and increase financial penalties for breaches of energy efficiency standards.

New clause 19—Decarbonisation of capacity market—

“Within six months of the day on which this Act is passed the Secretary of State must introduce measures to reduce the carbon intensity of power supplied by the capacity market by prioritising—

(a) demand side management,

(b) the supply of renewable energy, and

(c) electricity storage and other non-carbon-based energy storage systems.”

This new clause is a probing amendment to explore the potential of decarbonising the capacity market.

New clause 20—Onshore wind and solar power—

“(1) Within six months of the day on which this Act is passed, the Secretary of State must prepare and lay before Parliament a plan to significantly increase the proportion of the energy supply generated by onshore wind power in the United Kingdom.

(2) The plan under subsection (1) must set out measures which may include but are not limited to—

(a) revising national planning guidance on onshore wind and solar to increase the number of onshore wind and solar installations,

(b) improving infrastructure to ensure access to grid connections for existing onshore wind and solar installations, and

(c) increasing access to grants or subsidies to encourage new onshore wind and solar installations.

(3) The Secretary of State must report annually to Parliament to provide an update on the progress in increasing onshore wind and solar power.”

This new clause would require the Secretary of State to prepare a plan to significantly increase the proportion of the UK energy supply generated by onshore wind and solar power.

New clause 21—Value added tax on energy-saving materials—

“In Schedule 8, Part II, Group 23, note 1 of the Value Added Tax Act 1994 (meaning of “energy-saving materials”), at the end insert—

“(1) batteries used solely for the purpose of storing electricity generated by solar panels.””

This new clause includes batteries used solely to store energy generated by solar panels in the list of energy saving materials subject to a zero VAT rate.

New clause 22—Increasing grid capacity—

“Within three months of the day on which this Act is passed, the Secretary of State must prepare and lay before Parliament a plan to—

(a) reduce access costs and time frames for grid connections,

(b) reform the energy network to permit local energy grids, and

(c) accelerate the development of an offshore wind energy grid in the North Sea.”

This new clause seeks to require the Secretary of State to produce a plan to increase grid capacity.

New clause 23—Impact of insulation in homes on energy bills—

“The Secretary of State must, within six months of the day on which this Act is passed, prepare and lay before Parliament a report setting out—

(a) an assessment of the average cost of energy bills if homes were properly insulated, and

(b) the impact of improving all homes to the highest possible Energy Performance Contract rating on energy bills and greenhouse gas emissions.”

This new clause requires the Secretary of State to carry out an assessment of the average cost of energy bills if homes were insulated (a) properly and (b) to the highest possible Energy Performance Contract rating.

New clause 24—Government support for community energy—

“(1) Within three months of the passage of this Act, the Secretary of State must publish and lay before Parliament a report setting out the financial, policy and other support that the Secretary of State plans to make available to widen the ownership of low carbon and renewable energy schemes and increase the number of such schemes owned, or part owned, by community organisations.

(2) The report must set out—

(a) all policies, programmes or other initiatives with which the Secretary of State plans to support the development and construction of new low carbon community energy schemes;

(b) the level of financial support which will be made available for—

(i) the Rural Community Energy Fund,

(ii) the Urban Renewable Energy Fund, and

(iii) any other fund or support package designed to support the development of new low carbon community energy schemes;

(c) all policies, programmes or other initiatives the Secretary of State intends will increase community ownership of local low carbon energy schemes through shared ownership schemes;

(d) the steps the Secretary of State is taking to develop new market rules to make it easier for low carbon community energy schemes to sell the energy they generate;

(e) the number and the capacity of the new community energy schemes the Secretary of State expects to be constructed as a result of the measures set out in the report.

(3) Not less than twelve months after the publication of the report, and not later than the end of each subsequent period of twelve months, ending five years after the publication of the report, the Secretary of State must lay before Parliament and publish an assessment of the progress made by the policies, programmes and other initiatives set out in the report.

(4) The assessment must set out—

(a) the total amount of financial support provided by the policies in the report;

(b) the number and capacity of low carbon community energy schemes —

(i) completed, and

(ii) in development;

(c) the number and capacity of new shared ownership schemes;

(d) any changes the Secretary of State proposes to make to the policies, programmes and other initiatives included in the original report.”

This new clause would require the Government to report annually for 5 years on the support it is providing to Community Energy schemes and the number and capacity of such schemes that are delivered.

New clause 25—Investment protection agreements and climate change targets—

“Within six months of the day on which this Act is passed, the Secretary of State must—

(a) initiate procedures for the United Kingdom to withdraw from the Energy Charter Treaty;

(b) lay before Parliament a report setting out—

(i) the list of investment protection agreements to which the UK is a party which offer protections to the energy sector, and

(ii) an assessment of the risks they pose to the Secretary of State fulfilling duties in this Act with regard to the achievement of targets set by the Climate Change Act 2008.”

New clause 26—Prohibition on setting domestic energy prices according to region—

“Within six months of the day on which this Act is passed, the Secretary of State must by regulations prohibit energy companies from setting prices for domestic energy supply according to geographical region.”

This new clause would require the Government to bring forward legislation to end the regional pricing of domestic energy bills.

New clause 27—Report on extending price cap for off grid fuels—

“Within three months of the day on which this Act is passed, the Secretary of State must publish and lay before Parliament a report setting out the consequences of extending the price cap for off grid fuels.”

This new clause would require the Secretary of State to publish a report on extending the price cap for off grid fuels.

New clause 28—Prohibition on hydraulic fracturing—

“(1) Associated hydraulic fracturing is prohibited.

(2) “Associated hydraulic fracturing” has the meaning given by section 4B of the Petroleum Act 1998.

(3) The Secretary of State may by regulations make consequential provision in connection with this section.”

This new clause would introduce a permanent ban on fracking.

New clause 29—Prohibition of new oil and gas field developments and issuing of exploration and production licences—

“Within six months of the day on which this Act is passed, the Secretary of State must by regulations prohibit—

(a) the approval of new oil and gas field developments, and

(b) the release of new oil and gas exploration and production licences.”

This new clause would prohibit the approval of new oil and gas field developments and the issuing of new oil and gas exploration and production licenses.

New clause 30—Duty to phase down UK petroleum—

“(1) Within six months of the day on which this Act is passed, the Secretary of State must make regulations to amend section 9A of the Petroleum Act 1998.

(2) Regulations under subsection (1) must—

(a) remove the “principal objective” of maximising the economic recovery of UK petroleum;

(b) define a new “principal objective”.

(3) The new “principal objective” referred to in paragraph (2)(b) must provide for—

(a) delivery of a managed and orderly phase down of UK petroleum;

(b) advancement of the UK’s climate change commitments, including—

(i) the target for 2050 set out in section 1 of the Climate Change Act 2008, and

(ii) the commitment given by the Government of the United Kingdom in the Glasgow Climate Pact to pursue policies to limit global warming to 1.5 degrees Celsius;

(c) facilitation of a just transition for oil and gas workers and communities.

(4) Before making regulations under subsection (1) the Secretary of State must hold a public consultation which must include consultation with—

(a) the devolved administrations,

(b) relevant trade union and worker representatives,

(c) oil and gas workers and communities,

(d) relevant representatives from academia,

(e) relevant climate and environmental organisations and representatives,

(f) relevant industry representatives of petroleum and renewable energy businesses supporting the transition away from fossil fuels, and

(g) offshore energy training bodies.

(5) Relevant climate and environmental organisations and representatives under subsection (4(e)) must include the Climate Change Committee.”

This new clause would amend the Petroleum Act 1998 to remove the principal objective of maximising the economic recovery of UK petroleum and replace it with a new principal objective to deliver a managed and orderly phase down of UK petroleum, advance the UK’s climate targets, and support a just transition for oil and gas workers.

New clause 31—Requiring installation of solar panels on all new homes—

“(1) Within six months of the day on which this Act is passed, the Secretary of State must by regulations require—

(a) the installation of solar panels on the roofs of all new homes; and

(b) that new housing developments are planned in order to maximise solar gain.

(2) Regulations under subsection (1) may provide for exemptions in cases where the installation of solar panels on the roof of a new home is not appropriate.”

This new clause would mandate the installation of solar panels on the roofs of all new homes and require new housing developments to be planned in order to maximise solar gain.

New clause 32—Capacity market—

“(1) The Secretary of State must exercise the power in section 27 of the Energy Act 2013 to ensure that the capacity adequacy procured through the capacity market has a rising share of zero carbon flexible and dispatchable power that is consistent with achieving a zero carbon power system by 2035.

(2) The Secretary of State must ensure that all new multi-year capacity market contracts awarded to unabated fossil fuel capacity market units should have a contract end date no later than 31 December 2034.

(3) In exercising functions under this section, the Secretary of State must have regard to the desirability of maintaining security of supply.

(4) Draft regulations under subsection (1) must be laid before Parliament within six months of the day on which this Act is passed.”

This new clause probes the potential of decarbonising the capacity market.

New clause 33—Energy Demand Reduction Delivery Plan—

“(1) The Secretary of State must, within 12 months of the day on which this Act is passed, prepare and publish an Energy Demand Reduction Delivery Plan.

(2) In preparing the Energy Demand Reduction Delivery Plan under subsection (1), the Secretary of State must consult the Climate Change Committee.

(3) The Energy Demand Reduction Delivery Plan under subsection (1) must include but is not limited to—

(a) a quantitative assessment on the role of energy demand reduction in meeting the United Kingdom's carbon budgets and the 2050 net zero target;

(b) energy demand reduction targets for—

(i) aviation

(ii) surface transport,

(iii) shipping,

(iv) manufacturing and construction,

(v) buildings, and

(vi) agriculture,

in line with the UK’s carbon budgets and the 2050 net zero target; and

(4) an assessment of the role in achieving those targets of—

(a) energy efficiency improvements and technologies, and

(b) avoiding unnecessary energy use through infrastructure and behaviour change

(5) The Climate Change Committee must evaluate, monitor and report annually on the implementation of the Energy Demand Reduction Delivery Plan.”

This new clause would introduce a requirement to produce an Energy Demand Reduction Delivery Plan quantifying sectoral energy demand reduction targets and assessing how these can be achieved, and to review progress towards achieving them.

New clause 34—Production of sustainable aviation fuel—

“(1) The Secretary of State may by regulations introduce a price stability mechanism to incentivise the production of sustainable aviation fuel in the United Kingdom.

(2) A draft of regulations made under subsection (1) must be laid before Parliament within twelve months of the passage of this Act.

(3) A Minister must make a motion in each House of Parliament to approve the regulations laid before Parliament under subsection (2) within fifteen sitting days of the date on which they were laid.

(4) If both Houses of Parliament approve the regulations, they must be made in the form in which they were laid before Parliament.

(5) If either House of Parliament does not approve the regulations, the Secretary of State must lay a revised draft of the regulations before Parliament, and subsections (3) to (5) of this section apply to those regulations as they do to regulations laid under subsection (2).

(6) For the purposes of this section—

“price stability mechanism” is a mechanism under which a producer may enter into a private law contract with a Government-backed counterparty for the purposes of receiving a guaranteed price for a product or service;

“sitting day” is—

(a) in the case of the House of Commons, a day on which the House of Commons sits;

(b) in the case of the House of Lords, a day on which the House of Lords sits.”

New clause 35—Energy decarbonisation for homes: local authority funding—

“(1) The Secretary of State must, within six months of the date on which this Act is passed, carry out and publish an assessment of the benefits of providing long-term predictable funding to local authorities for the purpose of energy decarbonisation for homes in their local authority area.

(2) The assessment under subsection (1) must include an assessment of the likely impact of decarbonisation funding on—

(a) energy demand,

(b) fuel poverty, and

(c) installations of low-carbon heating systems.”

New clause 36—Introduction of a National Energy Guarantee—

“(1) Within six months of the date on which this Act is passed, the Secretary of State must prepare and lay before Parliament a plan to replace the existing energy price guarantee with a National Energy Guarantee in the form of a rising block tariff including a free or low-cost energy allowance to cover essential needs.

(2) When preparing the plan under subsection (1) the Secretary of State must consult independent bodies working on fuel poverty before determining the pricing of the allowance and the threshold above which the higher tariff should apply.

(3) Once the plan under subsection (1) has been laid before Parliament, the Secretary of State may by notice in writing require the regulator to introduce a rising block tariff, provided it satisfies the following conditions—

(a) that an allocation of energy set at no less than 50% of a defined minimum essential level is provided free of charge to all households;

(b) that the tariff incentivises energy-saving measures, particularly among higher income households;

(c) that households not connected to a mains gas supply will be given an increased electricity allowance, such that they are not disadvantaged;

(d) that the tariff is accompanied by additional allowances for disabled people and others who require high levels of energy usage to fulfil their essential needs; and

(e) that the tariff does not undermine the ability of energy suppliers to offer innovative tariffs through higher energy bands.”

This new clause would introduce a National Energy Guarantee in the form of a rising block tariff: an allowance for low-cost energy to cover essential needs, with a premium tariff to incentivise energy saving measures in households with high energy use, and additional allowances for those with unavoidably high energy needs.

New clause 37—Industrial lithium-ion battery storage facilities—

“(1) Within 12 months of the date on which this Act is passed, the Secretary of State must make regulations about the building of industrial lithium-ion battery storage facilities.

(2) Regulations under subsection (1) must include—

(a) a requirement for a relevant environmental permit to be issued by the Environment Agency, and

(b) a requirement for the relevant fire authority to be a statutory consultee in all planning applications for such facilities.”

This new clause would require the Secretary of State to make regulations for the building of industrial lithium-ion storage facilities which must include requiring an Environmental Permit from the Environment Agency and for the Fire Authority to be a statutory consultee in planning applications.

New clause 39—Duties of the Gas and Electricity Markets Authority in respect of off-grid fuels—

“(1) Within three months of the passage of this Act, the Secretary of State must by regulation extend the duties of the Gas and Electricity Markets Authority to the distribution and supply of fuels utilised for off-grid home heating.

(2) Regulations under subsection (1) must provide for GEMA to apply a cap on the price of fuel supplied for off-grid home heating proportionate to the cap applied in respect of on-grid homes.”

This new clause seeks to extend the duty of Ofgem to regulate off-grid fuels utilised for off-grid home heating and to ensure that a cap is applied for off-grid home fuels that is proportionate to the cap applied for on-grid homes.

New clause 40—Renewable liquid fuels for low-carbon heating—

“Within six months of the passage of this Act, the Secretary of State must by regulation introduce a Renewable Liquid Heating Fuel Obligation, setting annual obligations on fuel suppliers to ensure the supply of recognised low-carbon renewable liquid fuels for domestic and commercial heating.”

This new clause would require the Government to introduce a Renewable Liquid Heating Fuel Obligation for home and commercial building heating purposes, which would create a scheme that mirrors the Renewable Transport Fuel Obligations Order 2007. This would offer the option to off-gas-grid properties to switch to renewable liquid fuels.

New clause 41—Duty to ensure the lowest possible cost of energy to businesses and households—

“In exercising any function under or in connection with this Act, it is the duty of the Secretary of State to ensure the lowest possible cost of energy to businesses and households.”

This new clause is designed to be placed as Clause 1 of the Bill and would give the Secretary of State the duty to exercise functions under the Act which will result from the Bill in a way which would ensure the lowest possible costs of energy to businesses and households.

New clause 42—Restriction on energy company obligations—

“(1) In section 33BC of the Gas Act 1986 (promotion of reductions in carbon emissions: gas transporters and gas suppliers), after subsection (1) insert—

“(1ZA)) An order under subsection (1) may not impose an obligation on a gas transporter or gas supplier with fewer than 1,000 employees.”

(2) In section 33BD of the Gas Act 1986 (promotion of reductions in home-heating costs: gas transporters and gas suppliers), after subsection (1) insert—

“(1A)) An order under subsection (1) may not impose an obligation on a gas transporter or gas supplier with fewer than 1,000 employees.”

(3) In section 41A of the Electricity Act 1989 (promotion of reductions in carbon emissions: electricity distributors and electricity suppliers), after subsection (1) insert—

“(1ZA)) An order under subsection (1) may not impose an obligation on an electricity distributor or electricity supplier with fewer than 1,000 employees.”

(4) In section 41B of the Electricity Act 1989 (promotion of reductions in home-heating costs: electricity distributors and electricity suppliers), after subsection (1) insert—

“(1A)) An order under subsection (1) may not impose an obligation on an electricity distributor or electricity supplier with fewer than 1,000 employees.””

This new clause would restrict the Energy Company Obligation, which places an obligation on energy suppliers to install energy efficiency and heating measures, to large companies (those with over 1000 employees).

New clause 43—Planning applications for onshore wind energy developments—

“(1) Within three months of the date on which the Act is passed, the Secretary of State must—

(a) remove from the National Planning Policy Framework the restrictions placed by footnote 54 on the circumstances in which proposed wind energy developments involving one or more turbines should be considered acceptable, and

(b) publish guidance for wind developers on how they can engage communities, demonstrate local consent to local planning authorities, and provide financial benefits to local residents.

(2) Section 78 of the Town and Country Planning Act 1990 is amended by the insertion, after subsection (3), of the following new subsection—

“(3A) An appeal under this section may not be brought or continued against the refusal of an application for planning permission if the development is for the purposes of installing new onshore wind sites not previously used for generating wind energy.””

This new clause aims to remove the current planning restriction that a single objection to an onshore wind development is sufficient to block the development, to ensure that local communities willing to take onshore wind developments will receive some community benefit, and to provide that local decisions made on onshore wind cannot be overturned on appeal.

New clause 44—Independent review of the generation of bioenergy with carbon capture and storage—

“(1) The Secretary of State must commission an independent review of the generation of bioenergy with carbon capture and storage (BECCS).

(2) The review must report on the potential impact of BECCS on—

(a) household energy bills,

(b) lifecycle carbon emissions in the generation of energy,

(c) biodiversity,

(d) land use, and

(e) any other matter the Secretary of State considers appropriate.

(3) The Secretary of State must lay before Parliament—

(a) the report of the review, and

(b) the Government’s response to the review.

(4) No subsidy may be given for BECCS until the report of the review and the Government’s response have been laid before Parliament in accordance with subsection (3).

(5) Subsection (4) does not apply if an agreement for the giving of subsidy was concluded before the passage of this Act.

(6) For the purposes of this section—

“bioenergy” means energy from biomass;

“biomass” has the meaning given by paragraph 3 of the Renewables Obligation Order 2015 (SI 2015/1947);

“subsidy” has the meaning given by section 2 of the Subsidy Control Act 2022.”

This new clause would prohibit new government subsidies for generating bioenergy with carbon capture and storage (BECCS) until the Secretary of State commissions and publishes an independent review of BECCS to establish its impact on household energy bills, lifecycle carbon emissions, biodiversity and land use, and the Government’s response.

New clause 45—Modelling of the UK’s energy needs—

“(1) The Secretary of State must commission—

(a) a report on the most energy efficient, most economic and least carbon-intensive means to fulfil the UK’s current energy needs, and

(b) a report on comprehensive future energy modelling for the UK on the most energy efficient, most economic and least carbon-intensive means to meet the UK’s future energy needs.

(2) The Secretary of State must lay before Parliament the reports required under subsection (1) within six months of the day on which this section comes into force.”

This new clause would require the Secretary of State to commission and publish reports on the most energy efficient, most economic and least carbon-intensive means of satisfying the UK’s energy needs.

New clause 46—Review of Contract for Difference strike prices—

“(1) Within three months of the passage of this Act, the Secretary of State must undertake a review of Contract for Difference strike prices, and make a report to Parliament on the review.

(2) The review must—

(a) include an assessment of the viability of existing projects that have already been allocated,

(b) include an assessment of the UK-based supply chain for each project awarded Contracts for Difference, and

(c) re-evaluate the parameters for—

(i) the allocation for round five of Contracts for Difference funding, and

(ii) future allocation rounds.”

This new clause requires the Secretary of State to assess the viability of projects that have been awarded Contracts for Difference, and to undertake a review of the existing parameters for Contracts for Difference allocation.

New clause 47—Nationally significant infrastructure projects and forced labour—

“(1) Within six months of the day on which this Act is passed, the Secretary of State must by regulations provide that existing and new applicants for nationally significant infrastructure projects (within the meaning given by sections 14 and 15 of the Planning Act 2008) of over 50mw must demonstrate that their goods were not manufactured in, or produced with materials using forced labour.

(2) Regulations under subsection (1) must require all existing and new NSIP energy applicants to submit a report to the Planning Inspectorate to demonstrate clear and convincing evidence that the goods, or materials in the goods, were not mined, produced, or manufactured wholly or in part by forced labour.

(3) Within six months of the day on which this Act is passed the Foreign, Commonwealth and Development Office must create and publish a guide on interpreting reports for the Planning Inspectorate to consult when determining whether goods, or materials in the goods, were mined, produced, or manufactured wholly or in part by forced labour.

(4) Regulations under subsection (1) must provide that any nationally significant infrastructure project of over 50mw unable to demonstrate beyond reasonable doubt that its goods, or materials in the goods, were not mined, produced, or manufactured wholly or in part by forced labour must be recommended for rejection by the Planning Inspectorate upon the submission of the Inspection to the Secretary of State for Energy Security and Net Zero.

(5) Regulations under subsection (1) must provide for any company found to be circumnavigating the requirements of the regulations through third parties, subcontractors or third countries to be permanently barred from operating in the United Kingdom.”

This new clause will require the developers of new NSIP energy projects to demonstrate that their projects do not use, benefit from, or contribute to the forced labour.

New clause 48—Development of solar energy plants on agricultural land—

“(1) The Secretary of State must by regulations prevent the development of solar energy projects on sites of over 500 acres where over 20% of the land is Best and Most Versatile agricultural land.

(2) For the purposes of this section “Best and Most Versatile agricultural land” means land classed as grade 1, grade 2 or subgrade 3a under the agricultural land classification published by Natural England.

(3) Regulations under subsection (1) must—

(a) include provision for the prevention of the development of solar energy projects for which permission has already been sought, but not granted, and

(b) apply both to applications determined by local planning authorities and to those determined by the Planning Inspectorate.

(4) Regulations under subsection (1) may amend primary legislation.

(5) Within six months of the day on which this Act is passed, the Secretary of State must publish plans and incentives for the development of solar energy on rooftops, commercial and residential sites, and brownfield sites composed of ungraded land.”

This new clause would end the development of large-scale solar plants on BMV land and require the Secretary of State to publish plans to incentivise the building of solar on rooftops and brownfield sites.

New clause 49—Electricity Storage Capacity—

“(1) Within six months of the day on which this Act is passed the Secretary of State must lay before Parliament a strategy for an increase in the provision of electricity storage facilities to enhance the resilience and flexibility of electricity supply and ensure fair pricing for electricity users.

(2) The strategy referred to in subsection (1) must cover all forms of electricity storage, including—

(a) battery,

(b) hydrogen,

(c) ammonia,

(d) adiabatic compressed air energy storage systems, and

(e) hydroelectric storage.

(3) The strategy referred to in subsection (1) must address considerations relating to—

(a) licensing,

(b) planning,

(c) regulation,

(d) subsidy, and

(e) taxation.

(4) The strategy referred to in subsection (1) must set out—

(a) proposed pricing mechanisms for stored electricity, and

(b) provisions ensuring consumers pay a fair price for electricity.”

This new clause seeks to ensure the UK Government sets out a report to Parliament that demonstrates how it plans to meet the increased storage capacity that will be required with a future electricity network that is heavily reliant on renewable sources.

New clause 50—Renewable Liquid Heating Fuel Obligation—

“(1) Within twelve months of the date of Royal Assent to this Act, the Secretary of State must carry out a consultation on a renewable liquid heating fuel obligation.

(2) For the purposes of subsection (1) a renewable liquid heating fuel obligation means requiring fuel suppliers to meet annual targets to ensure the supply of recognised low-carbon renewable liquid fuels for domestic and commercial heating.

(3) For the purposes of the consultation under subsection (1) the Secretary of State must consult such persons as the Secretary of State considers appropriate.

(4) Within three months of the conclusion of the consultation under subsection (1) the Secretary of State must lay before Parliament a report of the consultation.

(5) Following publication of the report under subsection (4) the Secretary of State may by regulations set out a scheme requiring fuel suppliers to meet annual targets to ensure the supply of recognised low-carbon renewable liquid fuels for domestic and commercial heating.

(6) Regulations under subsection (5) may provide for—

(a) a scheme for the imposition of low-carbon renewable liquid fuel obligations on fuel suppliers;

(b) the appointment of an Administrator to run the scheme;

(c) matters in relation to the functions of the Administrator;

(d) the method by which amounts of low-carbon renewable liquid fuel are to be counted or determined for the purposes of provision made by or under the regulations;

(e) the Administrator to issue certificates to suppliers setting out the amounts of low-carbon renewable liquid fuel supplied, the time period in which they were supplied and other relevant facts;

(f) a supplier which does not wholly discharge its low-carbon renewable liquid fuel obligation for a given period to pay the Administrator a specified sum within a specified period, and further provision for connected purposes;

(g) the imposition of civil penalties, and objections to and appeals against civil penalties;

(h) the disclosure of relevant information by relevant persons; and

(i) such other provision as the Secretary of State considers appropriate.”

This new clause would require the Secretary of State to consult on a scheme for renewable liquid heating fuel obligations for home and commercial building heating purposes, and to publish a report on the consultation. The new clause would further allow the Secretary of State make regulations to set up a scheme for renewable liquid heating fuel obligations for home and commercial building heating purposes.

New clause 51—Tidal Range power—

(1) Within three months of the day on which this Act is passed, the Secretary of State must establish a Tidal Range Assessment Grant for the purposes of funding an independent evidence-led review of the potential contribution to be made by tidal range energy generation to the future energy generating capacity of the United Kingdom.

(2) The review under subsection (1) must include—

(a) pre-feasibility assessments of proposed tidal range projects and their potential both individually and together to contribute to the future energy generating capacity of the United Kingdom;

(b) whole life-cycle analysis and financial modelling to identify the optimum framework for the financing of tidal range projects as ultra-long lifecycle infrastructure assets, including an assessment of the potential merits of a Regulated Asset Base funding model for tidal range projects;

(c) a whole energy market analysis to establish and quantify the potential contribution of tidal range power to the decarbonisation of the United Kingdom’s energy system with particular reference to the value of predictable, flexible energy generation near centres of increasing demand and the potential of operational tidal range projects to bypass major grid barrier issues and enable a stable, operable, and secure decarbonised energy grid;

(d) an assessment of the current and planned innovations in sectors related to the development of operational tidal range projects, including in the broader supply chain, digital twins, power handling and distribution, and energy storage, and how these can be used to drive a reduction in cost and maximise the contribution of materials and components produced in the United Kingdom to tidal range projects;

(e) environmental baseline research and monitoring programmes of the proposed locations of selected tidal range projects for the purposes of establishing an enhanced understanding of the possible impacts on biodiversity and local ecosystems of operational tidal range projects; and

(f) whole-system analysis to evaluate other potential benefits of operational tidal range projects, such as coastal and flooding protection, the stimulation of related industries, and contributions to local economies.”

New clause 53—Community and Smaller-scale Electricity Supplier Services Scheme—

“(1) Within six months of the passage of this Act, the Secretary of State must by regulations require licensed energy suppliers with more than 150,000 customers (“eligible licensed suppliers”) to offer a Community and Smaller-scale Electricity Supplier Service agreement to any Community or Smaller-scale Energy site registered under section [Community and Smaller-scale Electricity Export Guarantee Scheme (No. 2)] for the purposes of allowing that site to sell electricity to local consumers.

(2) A Community and Smaller-scale Electricity Supplier Service agreement is an agreement which requires licensed suppliers to make a community or smaller-scale energy tariff available to consumers local to the exporting site that has regard to the export price paid or that would be paid to that site under section [Community and Smaller-scale Electricity Export Guarantee Scheme (No. 2)].

(3) The eligible licensed supplier may limit the total number of consumers the community or smaller-scale energy tariff is available to such that the total annual energy under the tariff is broadly equivalent to the total annual energy generated by the site.

(4) The eligible licensed supplier is the registrant for the meters of any local consumer purchasing energy under the community or smaller-scale energy tariff.

(5) The eligible licensed supplier may charge a reasonable fee for the provision of services under this section provided that it has regard to distribution, licensing and regulatory costs and any guidance provided by GEMA.

(6) The eligible licensed supplier must return any money raised through the sale of energy under a tariff set up under this section to the Community or Smaller-scale Energy site, save for the fee allowed under subsection (5).

(7) Eligible licensed suppliers must report annually to GEMA on—

(a) the number and capacity of community energy groups or smaller-scale sites offered Community and Smaller-scale Electricity Supplier Service agreements and the number who have contracted to use them,

(b) the total amount of electricity purchased under these agreements, and

(c) the tariffs for each agreement.

(8) GEMA must—

(a) produce guidance on the level of community or smaller-scale energy tariffs and on the reasonable charges that eligible suppliers may charge for Community and Smaller-scale Electricity Supplier Service agreements,

(b) make and publish a report annually on the operation of the export purchase agreements, setting out—

(i) the number of community energy projects or smaller-scale sites contracted with licensed energy suppliers under this section and the total amount of electricity purchased,

(ii) the licensed suppliers contracting with community energy groups or smaller-scale sites and the amount of electricity each has purchased,

(iii) an assessment of how the mechanism is performing and the contribution it is making to delivering secure and low carbon electricity supplies, and

(iv) recommendations for how Community and Smaller-scale Electricity Supplier Service agreements could be improved.

(9) Regulations under this section are subject to the affirmative procedure.”

New clause 56—Delinking of renewable and gas prices in the retail market—

“(1) Within six months of the passage of this Act the Secretary of State must publish a plan to ensure the delinking of gas and renewable and low carbon energy prices as they appear in the retail market.

(2) The plan may take into account—

(a) the establishment of a “green pool” for the direct sale of renewable and low carbon power into the retail market;

(b) the incorporation of low carbon and renewable power plants not possessing a Contract for Difference into Contract for Difference arrangements suitable for inclusion in a green power pool after it is established.”

This new clause requires the Secretary of State to produce a plan to end the linkage between renewable and low carbon energy and gas prices at retail level which results in most renewable power being priced in the retail market as if it were gas.

New clause 57—Onshore wind—

“(1) The Secretary of State must by regulations ensure that onshore wind installations are treated for the purpose of planning and development as local infrastructure and will be permitted or otherwise as if they were.

(2) Regulations under subsection (1) may amend any primary legislation passed before the passage of this Act.”

This new clause ensures that onshore wind development proposals in England and Wales are permitted to proceed on the same basis as other local infrastructure projects.

New clause 58—Community and Smaller-scale Electricity Export Guarantee Scheme (No. 2)—

“(1) Within six months of the passage of this Act, the Secretary of State must by regulations require licensed energy suppliers with more than 150,000 customers (“eligible licensed suppliers”) to purchase electricity exports from sites, including those operated by community groups, which generate low carbon electricity with a capacity below 5MW.

(2) The requirement imposed by regulations under subsection (1) is to be known as the Community and Smaller-scale Electricity Export Guarantee Scheme.

(3) Fossil fuelled local power plants with a capacity of less than 5MW are not eligible for participation in the Community and Smaller-scale Electricity Export Guarantee Scheme, with the exception of a local combined heat and power plant that generates electricity ancillary to its purpose of providing heat for local heat networks.

(4) “Fossil fuel” has the meaning given in section 104(4).

(5) Licensed energy suppliers with fewer than 150,000 customers may also purchase electricity exports from the sites specified in subsection (1) provided that they do so on the terms set out by the regulations.

(6) The regulations must require that eligible licensed suppliers—

(a) offer to the sites specified in subsection (1) a minimum export price set annually by the Gas and Electricity Markets Authority (“GEMA”),

(b) offer to those sites a minimum contract period of five years, and

(c) allow the exporting site to end the contract after no more than one year.

(7) Within six months of the passage of this Act, GEMA must—

(a) set an annual minimum export price for those sites that has regard to current wholesale energy prices and inflation in energy prices and the wider economy,

(b) introduce a registration system for exporting sites meeting the requirements set out in subsection (1) and wanting to access these export purchases,

(c) define specifications for the smart export meters required by such sites,

(d) define “low carbon electricity” in such a way that it includes renewable generation technology and may include other technology with extremely low carbon dioxide emissions,

(e) define requirements for an exporting site generating low carbon electricity with a capacity of less than 5MW to be registered as a Community or Smaller-scale Energy site, and maintain a register of such sites.

(8) Regulations under subsection (1) must provide that to access export purchase agreements exporters must—

(a) register their site with GEMA,

(b) install a smart export meter that meets specifications defined by GEMA, and

(c) notify GEMA if they are a community group.

(9) All licensed suppliers providing purchase agreements for sites specified in subsection (1) must report annually to GEMA—

(a) the number and capacity of Community or Smaller-scale Energy sites that have been offered contracts to purchase electricity and the number of such sites which agreed those contracts,

(b) the total amount of electricity purchased under those agreements, and

(c) the price paid for that electricity.

(10) OFGEM must make and publish a report annually on the operation of the export purchase agreements, setting out—

(a) the number of Community or Smaller scale Energy sites contracted with licensed energy suppliers under this section and the total amount of electricity purchased,

(b) the licensed suppliers contracting with Community or Smaller-scale Energy sites and the amount of electricity each has purchased,

(c) an assessment of how the mechanism is performing and the contribution it is making to delivering secure and low carbon electricity supplies, and

(d) recommendations on how the mechanism could be improved.

(11) Regulations under this section are subject to the affirmative procedure.”

New clause 59—Decarbonised electricity supply by 2030—

“(1) It is the duty of the Secretary of State to ensure that the supply of electricity in the UK is decarbonised by 2030.

(2) The Secretary of State must, within six months of the passage of this Act, produce and publish a plan which will set out how the duty in subsection (1) is to be achieved.”

This new clause is intended to provide for the UK’s electricity supply to be decarbonised by 2030.

New clause 60—Planning consent for new electricity pylons—

“(1) Within six months of the passage of this Act, the Secretary of State must by regulations provide for a fast-track planning process for electricity pylons along motorways and rail lines.

(2) Regulations under this section may amend primary legislation.”

New clause 61—National Warmer Homes and Businesses Action Plan (No. 2)—

“(1) The Secretary of State must, before the end of the period of 6 months beginning with the day on which this Act is passed, publish an action plan entitled the Warmer Homes and Businesses Action Plan, to set out proposals for delivery of—

(a) an Energy Performance Certificate at band C by 2035 in all UK homes where practical, cost effective and affordable, and

(b) an Energy Performance Certificate at band B by 2030 in all privately rented non-domestic properties, and

(c) the Future Homes Standard for all new builds in England by 2025.

(2) The Secretary of State must, in developing the Warmer Homes and Businesses Action Plan, consult the Climate Change Committee and its sub-committee on adaptation.”

New clause 62—Energy performance regulations relating to existing premises (No. 2)—

“(1) Within six months of the day on which this Act is passed, the Secretary of State must make regulations—

(a) amending the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (S.I. 2015/962) to require that, subject to subsection (2), all tenancies have an Energy Performance Certificate (EPC) of at least Band C by 31 December 2028; and

(b) amending the Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2019 (S.I. 2019/595) to raise the cost cap to £10,000.

(2) Regulations under subsection (1) must provide for exemptions to apply where—

(a) the occupier of any premises whose permission is needed to carry out works refuses to give such permission;

(b) it is not technically feasible to improve the energy performance of the premises to the level of EPC Band C; or

(c) another exemption specified in the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 has been registered in the Private Rented Sector (PRS) Exemptions Register.

(3) Within six months of the passage of this Act the Secretary of State must make regulations—

(a) amending the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 to enable local authorities to give notice to landlords that they wish to inspect a property in relation to those Regulations, requesting permissions from landlords and any tenants in situ at the time to carry out an inspection at an agreed time;

(b) expanding the scope of the current PRS Exemptions Register and redesigning it as a database covering properties’ compliance with or exemptions from EPCs;

(c) requiring a post-improvement EPC to be undertaken to demonstrate compliance;

(d) requiring a valid EPC to be in place at all times while a property is let; and

(e) raising the maximum total of financial penalties to be imposed by a local authority on a landlord of a domestic private rented sector property in relation to the same breach and for the same property to £30,000 per property and per breach of the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.

(4) Regulations under this section are subject to the affirmative procedure.”

New clause 67—Local supply rights—

“(1) Within six months of the day on which this Act is passed, the Secretary of State must publish a report on and consult on the introduction of local supply rights for community energy schemes, which would enable these schemes to sell their power to local customers.

(2) The report must set out—

(a) the potential benefits of community energy,

(b) the estimated additional costs to consumer bills that would be incurred in order for community energy schemes to account for 10% of energy generation by 2033, and

(c) an estimate of typical cost/benefit ratios for local communities and consumers.”

This new clause seeks to require the Government to publish a consultation on the introduction of local supply rights for community energy schemes within 6 months of the Act being passed.

New clause 68—Reports on the functioning of the energy price support framework—

“Within six months of the day on which this Act is passed, the Secretary of State must prepare and lay before Parliament reports assessing—

(a) the potential benefits of a social tariff would have on levels of fuel poverty across the UK,

(b) the adequacy of the current system for individuals who have higher energy needs due to a medical condition, and

(c) the potential benefits of a strategy that rewards households who use less energy by guaranteeing them a lower price through a tiered electricity plan.”

This new clause will require the Secretary of State to report on the functioning of the current framework as it relates to certain groups.

Government amendment 180.

Amendment 3, in clause 2, page 3, line 30, at end insert

“issued by the economic regulator or other competent authority”.

This amendment allows persons with a CO2 storage licence from the North Sea Transition Authority to operate a geological storage site for CO2 disposal, as per current legislation in the Energy Act 2010.

Amendment 4, page 3, line 34, leave out “a service” and insert

“a monopoly service to multiple users”.

This amendment would exclude from the requirement to have an economic licence, all forms of transportation where competitive markets are more likely to develop than monopolies e.g. shipping, rail or road. It would also enable investment in private spur connections to the regulated CO2 network.

Government amendments 131, 198, 181, 132, 199 to 209, 144 to 147, 139 and 140.

Amendment 175, in clause 65, page 58, line 13, leave out

“in the opinion of the Secretary of State”.

This amendment would remove the role of the Secretary of State in determining who qualifies as a “low carbon hydrogen producer.”

Government amendments 141 and 142.

Amendment 9, page 60, line 22, leave out clause 69.

This amendment, together with Amendments 10 to 12, would leave out the clauses of the Bill which provide for a hydrogen levy.

Amendment 10, page 61, line 1, leave out clause 70.

See explanatory statement to Amendment 9.

Amendment 170, in clause 70, page 61, line 2, leave out

“relevant market participants (see subsection (8))” and insert “the Secretary of State”.

This amendment, together with Amendments 171 to174, is intended to provide that the Secretary of State, rather than relevant market participants, should fund the hydrogen levy administrator.

Amendment 171, page 61, line 19, leave out “relevant market participants” and insert “the Secretary of State”.

See explanatory statement to Amendment 170.

Amendment 172, page 61, line 34, leave out “relevant market participants” and insert “the Secretary of State”.

See explanatory statement to Amendment 170.

Amendment 173, page 61, line 37, leave out subsection (5).

See explanatory statement to Amendment 170.

Government amendment 148.

Amendment 174, page 62, line 9, leave out subsection (9).

See explanatory statement to Amendment 170.

Amendment 11, page 62, line 12, leave out clause 71.

See explanatory statement to Amendment 9.

Amendment 12, page 63, line 11, leave out clause 72.

See explanatory statement to Amendment 9.

Amendment 13, in clause 73, page 64, line 22, leave out paragraph (a).

This amendment is consequential on Amendments 9 to 12.

Amendment 14, page 64, line 26, leave out “each paragraph of”.

This amendment is consequential on Amendments 9 to 12.

Amendment 15, page 64, line 27, leave out “under that paragraph”.

This amendment is consequential on Amendments 9 to 12.

Government amendment 121.

Amendment 16, page 65, line 6, leave out paragraph (a).

This amendment is consequential on Amendments 9 to 12.

Amendment 17, page 65, line 10, leave out

“a hydrogen production revenue support contract or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 18, page 65, line 15, leave out

“a hydrogen production allocation body or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 19, in clause 74, page 65, line 22, leave out paragraph (a).

This amendment is consequential on Amendments 9 to 12.

Amendment 20, page 65, line 31, leave out

“hydrogen production revenue support contract or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 21, in clause 75, page 65, line 35, leave out subsection (1).

This amendment is consequential on Amendments 9 to 12.

Amendment 6, page 66, line 2, after “that” insert “eligible”.

This amendment clarifies that the low carbon hydrogen producer must be eligible to receive support, which other amendments ensure means that they are compliant with the Low Carbon Hydrogen Standard.

Amendment 22, page 66, line 10, leave out “(1) or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 23, in clause 76, page 66, line 23, leave out paragraph (a).

This amendment is consequential on Amendments 9 to 12.

Amendment 24, page 66, line 30, leave out

“hydrogen production revenue support contracts or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 25, page 66, line 33, leave out

“hydrogen production revenue support contracts or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 26, page 67, line 10, leave out

“hydrogen production revenue support contracts or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 27, page 67, line 15, leave out “for producing hydrogen or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 28, page 67, line 17, leave out

“(whether in respect of hydrogen production or capture of carbon dioxide)”.

This amendment is consequential on Amendments 9 to 12.

Government amendment 143.

Amendment 29, in clause 77, page 67, line 40, leave out subsection (1).

This amendment is consequential on Amendments 9 to 12.

Amendment 30, page 68, line 19, leave out “hydrogen production counterparty or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 31, page 68, line 24, leave out paragraph (c) and insert—

“(c) how the eligible carbon capture entity to whom the offer is made may enter into a carbon capture revenue support contract as a result of the offer;”.

This amendment is consequential on Amendments 9 to 12.

Amendment 32, page 68, line 28, leave out

“eligible low carbon hydrogen producer or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 33, in clause 78, page 68, line 36, leave out

“an eligible low carbon hydrogen producer, or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 34, page 68, line 39, leave out

“hydrogen production counterparty or (as the case requires)”.

This amendment is consequential on Amendments 9 to 12.

Amendment 35, page 69, line 1, leave out “hydrogen production counterparty or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 36, page 69, line 16, leave out “hydrogen production counterparty or”.

This amendment is consequential on Amendments 9 to 12.

Amendment 37, page 69, line 35, leave out clause 80.

This amendment is consequential on Amendments 9 to 12.

Amendment 38, in clause 81, page 70, line 33, leave out

“hydrogen transport counterparty, hydrogen storage counterparty, hydrogen production counterparty”.

This amendment is consequential on Amendments 9 to 12.

Amendment 39, in clause 82, page 71, line 1, leave out paragraph (a).

This amendment is consequential on Amendments 9 to 12.

Amendment 40, in clause 83, page 71, line 32, leave out sub-paragraph (i).

This amendment is consequential on Amendments 9 to 12.

Amendment 41, page 71, line 40, leave out paragraph (e).

This amendment is consequential on Amendments 9 to 12.

Government amendment 149.

Amendment 42, page 72, line 9, leave out

“hydrogen production revenue support contract or”.

This amendment is consequential on Amendments 9 to 12.

Government amendments 150 to 152.

Amendment 43, in clause 84, page 73, line 7, leave out subsections (3) and (4).

This amendment is consequential on Amendments 9 to 12.

Government amendments 210 to 213.

Amendment 44, in clause 86, page 74, line 9, leave out paragraphs (b) and (c).

This amendment is consequential on Amendments 9 to 12.

Amendment 45, page 74, line 22, leave out paragraphs (b) and (c).

This amendment is consequential on Amendments 9 to 12.

Amendment 46, age 74, line 28, leave out “a hydrogen levy administrator”.

This amendment is consequential on Amendments 9 to 12.

Amendment 47, in clause 88, page 77, line 2, leave out paragraph (b).

This amendment is consequential on Amendments 9 to 12.

Government amendments 153 to 162.

Amendment 48, page 78, line 37, leave out clause 90.

This amendment is consequential on Amendments 9 to 12.

Government amendment 163.

Amendment 49, in clause 91, page 79, line 36, leave out paragraph (b).

This amendment is consequential on Amendments 9 to 12.

Government amendments 164, 70, 165, 122 to 124 and 214 to 216.

Amendment 7, in clause 128, page 115, line 6, after “transportation” insert

“by pipeline, ship or other means,”.

Carbon dioxide transport by ship is almost certain to be a part of the Scottish Cluster and subsequent phases of other CCUS clusters and this amendment makes explicit that transportation by ship or other means would be included in the financial assistance available under clause 103.

Government amendments 125 to 129, 71, 72, 133 and 134.

Amendment 8, in clause 142, page 127, line 2, leave out from “heat” to the end of line 18 and insert “from a renewable source.”

This amendment would enable the Secretary of State to make provision for the establishment of a low-carbon heat scheme which encouraged the use of heating appliances that generate heat from a renewable source but which might previously have burnt a fossil fuel.

Government amendments 217 and 218.

Amendment 50, in clause 152, page 133, line 30, at end insert

“, except that that power is not exercisable without a warrant issued by a justice of the peace.”

This amendment would require a warrant for the exercise of the power to enter premises in a hydrogen grid conversion trial.

Amendment 130, page 136, line 3, leave out clause 155.

This amendment would remove clause 155 and therefore ensure that fusion energy facilities are still required to secure a nuclear site licence.

Amendment 1, in clause 159, page 137, line 31, at end insert—

“(1A) The person designated under subsection (1) must be a public body with no other roles or interests in the energy sector.”

This amendment ensures that the ISOP is a public body, not an individual or a private company, and has no conflicting interests.

Amendment 51, in clause 160, page 138, line 9, at beginning insert—

“(A1) The ISOP must carry out its functions in the way that it considers is best calculated to ensure the lowest possible cost of energy to businesses and households.”

This amendment, together with Amendment 52, would introduce a new primary objective for the Independent System Operator and Planner (ISOP), to which the existing objectives for the ISOP in the Bill would become secondary.

Amendment 52, page 138, line 9, at beginning insert “Subject to subsection (A1),”.

See explanatory statement to Amendment 51.

Government amendments 73 to 76.

Amendment 2, in clause 162, page 140, line 5, leave out subsection (1) and insert—

“(1) The ISOP must have regard to the strategic priorities set out in the current strategy and policy statement but will otherwise carry out its functions independently of the Secretary of the State.”

This amendment ensures that the Independent System Operator and Planner (ISOP) is independent.

Government amendments 166 and 77 to 79.

Amendment 53, page 178, line 25, leave out clause 212.

This amendment would remove the clause granting the Secretary of State an extension of time for the extension of powers relating to smart meters.

Government amendments 103 and 219 to 224.

Amendment 54, in clause 227, page 188, line 31, leave out paragraph (c).

This amendment would ensure that it was not possible to impose a penalty on a person for not complying with a request for information relating to a heat network zone.

Amendment 55, in clause 228, page 189, line 9, leave out subsections (2) to (10) and insert—

“(2) Regulations made by virtue of subsection (1) may not impose a requirement on any person.”

This amendment would prevent regulations about heat networks within heat network zones from imposing mandatory requirements.

Amendment 56, page 192, line 30, leave out clause 230.

This amendment would leave out the clause which provides for the enforcement of heat network zone requirements.

Amendment 57, page 193, line 12, leave out clause 231.

This amendment would leave out the clause which provides for penalties to be imposed by regulations about heat network zones.

Amendment 58, page 196, line 3, leave out clause 235.

This amendment, together with Amendments 59 to 63, would remove Chapter 2 of Part 9 of the Bill, on energy smart appliances.

Amendment 59, page 197, line 13, leave out clause 236.

See explanatory statement to Amendment 58.

Amendment 60, page 198, line 4, leave out clause 237.

See explanatory statement to Amendment 58.

Amendment 61, page 199, line 39, leave out clause 238.

See explanatory statement to Amendment 58.

Amendment 62, page 200, line 22, leave out clause 239.

See explanatory statement to Amendment 58.

Amendment 63, page 201, line 14, leave out clause 240.

See explanatory statement to Amendment 58.

Amendment 64, page 205, line 14, leave out clause 246.

This amendment, together with Amendments 65 to 67, would leave out Part 10 of the Bill, on the energy performance of premises.

Government amendments 182 to 184.

Amendment 65, page 206, line 29, leave out clause 247.

See explanatory statement to Amendment 64.

Amendment 66, page 207, line 1, leave out clause 248.

See explanatory statement to Amendment 64. This amendment would remove a clause which would enable the creation of criminal offences by regulations.

Government amendment 185.

Amendment 67, page 208, line 6, leave out clause 249.

See explanatory statement to Amendment 64. This amendment would remove a clause which would enable the amendment, repeal or revocation of primary legislation by regulations.

Government amendments 186 to 193.

Amendment 68, page 214, line 1, leave out clause 255.

This amendment would leave out the clause which provides for requirements to be imposed by energy savings opportunity scheme regulations.

Amendment 69, page 216, line 16, leave out clause 257.

This amendment would leave out the clause which provides for the enforcement of energy savings opportunity scheme regulations and the creation of connected penalties and offences.

Government amendments 225 to 229, 80, 81, 230 to 238, 82, 194, 239, 195, 240, 241, 83, 242, 84 to 94, 243, 176, 177, 196, 178, 244, 104 to 110, 169, 179, 111 to 120, 95 to 100, 197, 101, 135 to 138, 167, 168 and 102.

[Andrew Bowie]

I am delighted to rise today to bring before the House our landmark Energy Bill for its consideration. This world-leading, historic Bill—a Conservative Bill—will deliver for this country cleaner, cheaper and more secure energy. It will level up this country, while contributing to levelling down bills for the British people. It will unleash new technology, liberate private investment in clean technologies, modernise and future-proof our energy network, and deliver for this country and for future generations.

The United Kingdom already has a great story to tell on reducing our carbon emissions. We have reduced our emissions faster than any other G7 nation. We were the first European nation to legislate for net zero. We have the first oil and gas basin dedicated to going net zero and the first, second, third and fourth-largest offshore wind farms in the world operating and generating power off the coast of Great Britain right now. We have eliminated our reliance on coal. We have grown to more than 40% of energy being generated by renewables. We have announced further investment in carbon capture, usage and storage, and we are pressing ahead with Great British Nuclear, which I launched two months ago with an exciting programme for small modular reactors. We are on track to deliver 24 GW of nuclear power on the grid by 2025.

[Ian Paisley (North Antrim) (DUP)]

Can the Minister confirm that at the weekend, agreements were made that have removed Northern Ireland from benefiting from the renewable liquid fuel agreements? Is that the case, and if so, why?

[Andrew Bowie]

If the hon. Gentleman will have patience, I will come to the renewable liquid heating fuel amendments later in my speech, where I am happy to direct any questions to which he is seeking answers.

We have done all the things I have mentioned while growing our economy. We have cut our emissions by 40% while growing our economy by 60%. It is an inherently Conservative value—a value close to the hearts of all on the Government Benches—to pass on what we inherit in a better state to the next generation. That includes the state of our environment and our climate. There is also no more Conservative value than to ensure the security of our nation and its people, and that includes our energy supply.

[John Redwood (Wokingham) (Con)]

On that very point—security—what provision is being made for days when there is no wind, given that we will see the closure of most of our nuclear power stations this decade and will have little else to rely on, other than fossil fuel? How are we going to get through?

[Andrew Bowie]

My right hon. Friend knows that I am a great champion of supporting our oil and gas industry, which continues to supply a large amount of our energy baseload and will do for a significant amount of time to come. As he also knows, we are investing a lot of time and money into ensuring that we deliver the next generation of nuclear power plants, including small modular reactors, so that we have the energy baseload that this country needs so that, as he rightly suggests, when the wind does not blow and the sun does not shine, people can still be assured that the lights will come on. The Conservative principles that I have spoken about are at the very heart of the Bill, which I am pleased to bring before the House today.

It is true that some time has passed since the Bill was introduced in July last year. The Opposition spokesperson, the hon. Member for Southampton, Test (Dr Whitehead), was but a boy when this Bill was introduced last year. A huge amount of constructive dialogue and dedicated work has taken place during that time. I thank all the Secretaries of State at the Department for Business, Energy and Industrial Strategy and the Department for Energy Security and Net Zero, the Ministers and the Prime Ministers who have been involved since the Bill was introduced.

Since the Bill came to this House from the other place, I have met and engaged with colleagues from all sides of House. We debated the Bill in a lively Second Reading and spent 72 long hours in Committee, so I start by thanking everyone across the House, especially the shadow ministerial team, the former Scottish National party energy spokesman, the hon. Member for Kilmarnock and Loudoun (Alan Brown), and all on the Government side, for their constructive engagement in ensuring that we got the Bill to these final stages in a state that, I hope, will be broadly welcomed by most, if not all, Members.

[Richard Graham (Gloucester) (Con)]

Will the Minister give way?

[Andrew Bowie]

I would be delighted.

[Richard Graham]

The Minister referred to base energy load, which is crucial in respect of nuclear energy, but is also relevant to marine energy, which, as he knows, we have huge potential for around our coast, particularly in Scotland. Will he confirm that that will play an important part in the next contracts for difference round and in his thinking?

[Andrew Bowie]

I am delighted to confirm that that will play an important part. Indeed, we have ringfenced £10 million to support marine energy in the country. We believe it has a huge role to play in delivering our energy baseload. Indeed, the innovations being made in that technology are incredibly exciting and will play a huge part in our energy baseload moving forward.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

rose—

[Andrew Bowie]

It is always a delight to give way to the hon. Gentleman.

[Jamie Stone]

The Minister is incredibly well-mannered. The irony is that we generate an enormous amount of power from onshore wind in the highlands, yet we face the highest levels of fuel poverty. New clause 1, tabled in my name, talks about increasing the community benefit in some way and widening the number of communities who could benefit. I am aware that the hon. Member for Rutland and Melton (Alicia Kearns) has tabled a similar amendment, and I would like to voice my support and that of the Liberal Democrats for it.

[Andrew Bowie]

I thank the hon. Gentleman for his constructive intervention. The Government recently launched a consultation on community benefits, because we do understand that those communities being asked to host pieces of critical national infrastructure should be recompensed for that, and that the community benefits that the individuals, communities and groups in those areas receive should be enough to recompense them for what they are doing in the national interest.

[Matt Hancock (West Suffolk) (Ind)]

On infrastructure of national scale, in order to keep people on side, is it not also vital that such projects are in the right place—unlike the Sunnica development near my constituency—so that those of us who care about the agenda can support it wholeheartedly and ensure that the Conservative values that the Minister talks about are rightly behind the green energy revolution?

[Andrew Bowie]

Absolutely. It is incumbent on all involved, from the transmission operators to the developers, National Grid, the electricity system operator and indeed the Department and those across Government, to ensure that where such pieces of critical national infrastructure are being built, developed and planned, plans are proceeded with and laid in a way that is conducive to local sentiment and local support and will provide for that local community for many years to come.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)]

Will the Minister give way?

[Andrew Bowie]

Yes. I would be delighted to give way.

[Angus Brendan MacNeil]

I am grateful to the very polite Minister, as was said by the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone). I am sure the Minister is aware that heat pumps will produce about 2.5 times the energy of the electricity put into them, or four times for ground source heat pumps—they are multipliers of the power put into them. The Government have a plan for 600,000 to be installed by 2028. Will we see those? How many will we see next year? Does he have intervening targets for that? At the moment, they are at only a 10th of where the target would have them.

Secondly, a point asked in my constituency is about the new £10 million community energy fund, which relates only to England, despite energy being reserved. Will he enlighten Euan Scott, my constituent, please?

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. There is so much pressure on time, so it is really important that interventions are short.

[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.

[Andrew Bowie]

I was very pleased to take that intervention. I thank my right hon. Friend for it. If he is patient, I will explain to the rest of the House—I think Committee members are aware—what we seek to do with the hydrogen levy as it stands.

The Government’s amendments will remove provisions that enabled the levy to be imposed on energy suppliers in Great Britain, ensuring that within Great Britain the levy can be placed only on gas shippers. In the case of Northern Ireland, the amendments seek to ensure that only gas supply licence holders who engage with gas shipping can be subject to that levy. That reflects the different approach to the licensing of gas shipping across Great Britain and Northern Ireland.

The revised provisions will provide a fairer approach to funding hydrogen, placing the charge higher up the supply chain, with the potential for costs to be spread to the sectors expected to benefit most from early hydrogen development, not the wider British public. I remind the House that the Bill will also enable the option of funding hydrogen through the Exchequer. By providing two robust and reliable options for hydrogen funding, we will help bolster industry confidence in the viability of the UK hydrogen economy and boost private investment, with the potential to unlock significant energy security and economic benefits. The hydrogen sector could support over 12,000 jobs and generate up to £11 billion in private investment by 2030.

I must be clear, and the House should understand, that the Bill will not actually introduce a levy on gas shippers. Instead, it will enable the Government to introduce the levy through secondary legislation.

[Craig Mackinlay (South Thanet) (Con)]

It is very welcome that the levy will not be applied on households as a direct cost they will see in their bills, but it is something of a sleight of hand just to push it further up the supply chain, because it will be an energy-related cost somewhere in the supply chain that will feed down to every business and household in another way through an additional charge they will face, much like VAT. I welcome it as far as I can, but I would rather see it removed in its entirety.

[Andrew Bowie]

I thank my hon. Friend for his contribution. As we have spoken about before, I understand his position on the levy. It is our belief that in ensuring that the levy is placed higher up the chain, the sectors that will benefit most from the early development of hydrogen will bear the brunt of the cost, not the wider British public. That is the aim and intention of what we seek to achieve.

As I was saying, the Bill will not introduce the levy on to shippers; instead, it will enable the Government to introduce the levy through secondary legislation. I am sure we will continue to have this debate in the months and years ahead.

I turn to Government new clause 63, amendment 8 and new clauses 40 and 50 on renewable liquid heating fuel. I thank my right hon. Friend the Member for Camborne and Redruth (George Eustice) for his work and amendments relating to renewable liquid fuels for low-carbon heating. His constructive work with the Government has been incredibly helpful and positive. I also pay tribute to my hon. Friend the Member for Bury St Edmunds (Jo Churchill), who has been championing the use of renewable liquid fuels for low-carbon heating for many years.

As the recent biomass strategy made clear, such fuels will have a critical role to play in decarbonising our economy. We recognise that they have the potential to play an important role in decarbonising heat, especially as not all off-grid properties will be suitable for electrification. We will explore the potential of these fuels for heat by issuing a consultation within 12 months. We want to take the powers now to support the use of these fuels in heat in the future, should they be needed. That is why we tabled Government new clause 63, taking powers to impose obligations on heating fuel suppliers to increase the supply of renewable liquid heating fuels.

[Nickie Aiken (Cities of London and Westminster) (Con)]

In my constituency we have a particular issue with commercial and domestic use, because residents are often in the same building as commercial properties. It would be helpful for the Minister to look at the definition of heat network systems, so that Ofgem can understand what systems qualify as heat networks in domestic properties, which are a real issue in my constituency.

[Andrew Bowie]

The measures in the Bill will provide the Government with powers to implement heat network zoning in England. Those include powers to develop a nationwide methodology for identifying and designating areas as heat network zones, and to establish a new zoning co-ordinator role—which we generally expect will be filled by local government, though my hon. Friend is free to apply—with responsibility for designating areas as heat network zones and enforcing requirements in them. They also include powers requiring heat networks developed in zones to meet a low-carbon requirement, and to ensure that certain buildings and heat sources connect to a heat network in a zone within a specific timeframe. The relevant Minister in the Department and I will be happy to meet my hon. Friend to discuss how that will be relevant to her urban constituency as we move forward and seek to implement these proposals.

[Richard Fuller (North East Bedfordshire) (Con)]

I join the Minister in thanking my right hon. Friend the Member for Camborne and Redruth (George Eustice) for leading on the measures included in new clause 63. On the renewable liquid heating fuel obligation, the Minister said that he would do a consultation within the next 12 months. Many of my constituents who are off-grid also want secondary legislation to come through in the next 12 months. Can he assure the House that that is his intention?

[Andrew Bowie]

I can confirm that we will move to a consultation in the next few months. Indeed, we will use the powers to support the use of those fuels in heat in future, should they be needed. Again, as we move through the consultation period, other Ministers in the Department and I would be delighted to meet my hon. Friend and all Members concerned. I understand that this issue affects many constituencies across the country and, rightly, interests many right hon. and hon. Members. As we move forward with the consultation and towards implementing the powers, we will be delighted to meet Members.

[David Duguid (Banff and Buchan) (Con)]

I welcome Government new clauses 52 and 63, which are of particular value to those living in certain parts of the country, such as north-east Scotland, as the Minister is very much aware. Will he join me in reinforcing and emphasising the benefit of developments in sustainable aviation fuel and renewable liquid heating fuel respectively, particularly in Aberdeenshire?

[Andrew Bowie]

Yes, I am very pleased to welcome developments in renewable liquid heating fuel. The consultation, which will be UK-wide, will benefit those living in rural constituencies such as Banff and Buchan, and those across north-east Scotland and rural Britain. I welcome the support for the sustainable aviation fuel amendment, to which I will refer shortly.

[Angus Brendan MacNeil]

To back up the point made by the hon. Member for Banff and Buchan (David Duguid), standard consultation and the legislation being in place in 12 months do not show the necessary urgency. That is the point that unites many people. The Minister, with his Thompson gun approach to spitting things out, got that one out very quickly, but we need it done an awful lot more quickly than starting within 12 months. This Government will probably be gone in 12 months.

[Andrew Bowie]

I am determined to work very hard to ensure that this Government will not be gone in 12 months. However, we are taking the powers now to ensure support for the use of these fuels in heat in future, if needed. I should make clear that we are starting the consultation within the next 12 months, not in 12 months. It will be within the next year.

[Ian Paisley]

There is a vast rural housing network in Northern Ireland of so many households, and there is overreliance on heating oil. What is the arrangement for using renewable liquid fuels in Northern Ireland?

[Andrew Bowie]

Once again, I thank the hon. Gentleman for his question. I was just about to answer his original question: I can confirm that officials from the Department for Energy Security and Net Zero in London have been in discussion with Northern Ireland officials, who are broadly content with the Government’s approach on this issue. However, conversations will continue with Northern Ireland officials on what we can do to support renewable liquid heating fuels in Northern Ireland. Once again, as on the other issues I have specified, I would be delighted to meet the hon. Gentleman and colleagues from across Northern Ireland to discuss how this Government can ensure that the support delivered in Great Britain can be replicated in Northern Ireland.

I turn back to my comments on renewable liquid heating fuels. With regard to amendment 8, the powers in clause 142 relate only to the planned clean heat market mechanism, for which the Government’s focus is on supporting the development of the market for electric heat pumps. We do not believe that expanding the power set out here is necessary to allow for boilers burning renewable liquid fuels to be installed or used. In the light of those steps, I hope my right hon. Friend the Member for Camborne and Redruth is reassured by the Government’s action and will feel able not to press the amendment.

I turn to Government new clauses 52 and 169 and new clause 35 on sustainable aviation fuel. I thank my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) for his constructive engagement with me and colleagues at the Department for Transport. This Government are committed to ensuring that the UK sustainable aviation fuel programme is one of the most comprehensive in the world. That is why in the Bill we are committing to publish a consultation on the options for designing and implementing a revenue certainty scheme within six months of it being passed.

We will also update Parliament within 18 months on the development of a sustainable aviation fuel revenue certainty scheme. As the Secretary of State for Transport, my right hon. Friend the Member for Forest of Dean (Mr Harper), set out in a written ministerial statement yesterday, that builds on our commitment to deliver a revenue certainty scheme for domestic sustainable aviation fuel production by the end of 2026. The intention is that the scheme will be industry-funded. Alongside that, we have published a plan for delivering the scheme, which contains a timeline of key milestones such as a public consultation on options, an associated Government response, design phases, and delivery and legislative steps.

[Chris Grayling (Epsom and Ewell) (Con)]

I thank my hon. Friend for his constructive approach on this issue. Could I seek one more assurance? When the consultation is finished, will the Government review the likelihood of securing the investment we want? If there is still doubt, will he ensure that discussion takes place about whether the Government should play a part in that, potentially at a future fiscal event?

[Andrew Bowie]

I can give my right hon. Friend that assurance and go further. That commitment, alongside our £165 million advanced fuels fund and the world-leading SAF mandate, will help to provide strong market signals and incentives to drive the demand and supply of SAF from sustainable sources. Future funding decisions on SAF will be considered as part of the next spending review.

I would like to turn briefly to community energy. I thank my hon. Friend the Member for Wantage (David Johnston) for his continued engagement on the Bill, particularly his championing of community energy, alongside many others in this House. The Government recognise that community energy projects can have real benefits for the communities in which they are based, and are keen to ensure that they deliver value for money for consumers. That is why we have launched a new £10 million community energy fund, which expands on the success of the previous rural community energy fund, to enable both rural and urban communities across England to access grant funding to develop local renewable energy projects for investment.

[Sally-Ann Hart (Hastings and Rye) (Con)]

It is fantastic that the Government have announced the new fund to help community energy schemes get off the ground. That is a very welcome step. Could my hon. Friend outline what steps he will take to remove the barriers that prevent community energy schemes from accessing local markets?

[Andrew Bowie]

I can indeed. I am delighted to tell my hon. Friend that alongside our proposed fund, we are committing to publishing an annual report to Parliament and to consulting on the barriers the sector faces when developing projects.

I am also very pleased to announce that His Majesty’s Government have reached an agreement with the Scottish Government to amend the Bill to secure their support for a legislative consent motion in the Scottish Parliament. The comprehensive set of amendments agreed with the Administration in Edinburgh will strengthen the Bill’s consultation provisions and require the Secretary of State to seek the consent of devolved Ministers before exercising powers under clauses 2, 3 and 293.

I would also like to take this opportunity to confirm to the House and to the Scottish Government that by virtue of clause 218(2)(a)(ii), the regulatory cost the GEMA can recover from gas and electricity licence holders from across Great Britain includes any costs it occurs performing the Scottish licensing function. The Government are disappointed that the Welsh Government have decided not to support the legislative consent motion for the Bill in the Senedd. However, as a sign of good faith the Government will extend the amendments agreed with the Scottish Government to apply in Wales and Northern Ireland where appropriate.

A number of Government amendments for consideration on Report relate to commencement. They ensure that clauses, such as those relating to the smart meter roll-out and low carbon heat schemes, will come into force as soon as the Bill gains Royal Assent. The remaining Government amendments are technical in nature and, as such, I do not propose to discuss any of them in great detail—I am sure Madam Deputy Speaker is delighted.

[Christine Jardine (Edinburgh West) (LD)]

I thank the Minister for giving way, but I notice that I cannot see any mention in the amendments of standing charges. I know that is a very difficult thing, but in my constituency there is a great deal of concern about the fact that there is no uniformity in the United Kingdom on standing charges. My constituents can pay around £100 a year more than people elsewhere in the country. Do the Government have any intention to address that issue, along with issues such as domestic insulation?

[Andrew Bowie]

I thank the hon. Lady very much for her intervention and her question. I am engaging with Ofgem on that very issue and am looking to convene a meeting in Edinburgh with all the significant players involved in energy transmission and production in Scotland at the earliest available opportunity, so we can discuss the issues regarding standing charges and other issues that affect Scottish bill payers. I would be very delighted to engage with her as we move towards that meeting taking place.

[Angus Brendan MacNeil]

The Minister may have heard on “The World at One” on Radio 4 last week the head of OVO Energy talking about the movement for the cost of transmission from the unit price to the standing charge price, which has ramped up standing charges and is very concerning to many people because that disproportionately impacts poorer bill payers. Will he look at that issue and discuss it with Ofgem at his meeting?

[Andrew Bowie]

Yes, I can confirm that I will raise that issue with Ofgem at my next meeting, and at the next available opportunity I have to meet the Chairman of the Energy Security and Net Zero Committee, I will certainly have an answer for him on that question.

[Anna McMorrin (Cardiff North) (Lab)]

In 2013, the then coalition Government cut all the energy efficiency programmes, plunging millions of people into debt. What plans does he have to ensure there is an insulation programme to provide desperately needed energy efficiency right across homes and households?

[Andrew Bowie]

This is the biggest piece of energy legislation ever passed by the British Parliament. We are driving forward with schemes to help insulate houses, drive down bills, and deliver cleaner and more secure energy, and all we can get from the Opposition is criticism. We have ramped up our renewable energy production to over 40%. We have eliminated coal. We are developing new nuclear, which the Opposition failed to do over 13 years in government. Rather than carping from the sidelines, it would be useful if Opposition Back Benchers got on board, supported the Bill and supported our great British companies developing the technology to take this country forward, creating the new jobs, ensuring security of supply and driving towards net zero, which means we will leave this country and the planet in a better place for the next generation, instead of trying to score political points at the expense of this Government who are seeking to deliver for the British people. As such, I am immensely proud of the Bill. It was strong before and it is even stronger now. It is, as I have just said, the single biggest piece of energy legislation ever to be brought before the House.

[Caroline Lucas (Brighton, Pavilion) (Green)]

rose—

[Andrew Bowie]

I am afraid I will not give way.

The Bill is a revolution in community energy: restarting our nuclear sector; regulating for fusion; developing carbon capture, usage and storage; supporting the technology of the future; liberating private finance; developing our own oil and gas reserves; building an energy network of the future to secure our energy supply; securing our energy base so we are powering Britain from Britain; growing our economy; investing to ensure lower bills; and driving towards a cleaner future. That is what the Bill achieves. It was brought here and delivered today by the Conservative Government, moving the country forward into a brighter, more secure and cleaner future. Therefore, Mr Deputy Speaker, with great pleasure, I commend the new clauses and amendments to the House.

[Several hon. Members rose—]

--- Later in debate ---

[Mr Deputy Speaker (Sir Roger Gale)]

I apologise to those Members who have not been called; a note will be made and a count taken. I call the Minister, Andrew Bowie.

[Andrew Bowie]

I am delighted to rise. I must apologise in advance of my closing remarks: given the time available, I will not be able to address every single point, question, statement and amendment raised today. [Interruption.] That is the first time I have ever been told to speed up my speaking style. However, I will commit to write to every Member who has raised a question, and certainly questions that are pertinent to how we implement some of the regulations that we are presenting here today and which will be subject to discussion in the Lords next week.

On new clause 47, presented by my hon. Friend the Member for Rutland and Melton (Alicia Kearns), we keep all sanctions under review and she knows that we cannot comment on any potential future designations. We have a global rights sanctions regime, which allows us to take action when the necessary legislative criteria are met and we assess sanctions are appropriate. I can confirm to her that we take an interest in the concerns she set out and will continue to act. We have introduced new guidance on the risks of doing business in Xinjiang, enhanced export controls and announced the introduction of financial penalties under the Modern Slavery Act 2015.

[Alicia Kearns]

I know the Minister has historically been very strong on this point. I am interested in the fact that the Government have raised that point about sanctions and the possibility of sanctions, because we have not heard that before. Both the US and EU have sanctioned those who use slave labour within their supply chains. If the Government—I hope they are saying this today; I know they cannot comment on sanctions designations—are saying that they will bring forward sanctions against companies that are completely complicit in slave labour—we have the evidence both from the US and our own work—that will be incredibly positive because it would send a strong deterrent message across the industry that we will not accept slave labour in our supply chains.

[Andrew Bowie]

I thank my hon. Friend for her comments and constructive engagement over the past couple of days and months. As I said, I commit to working with her and other interested parties on this matter as we continue to do what we can to combat the existence of slave labour in that market.

The energy efficiency amendments were raised a number of times. I want to be absolutely clear: we are simply seeking to replace the power to amend the energy performance of premises regime, which was lost as we departed the EU. Brexit gives us the power to do that. I can categorically guarantee before the House that we are not creating new offences. In any case, any new offences on anything—as is always the case—would have to be subject to debate, scrutiny and vote in this place, which Brexit has allowed us to do.

My hon. Friend the Member for South Thanet (Craig Mackinlay) raised the issue of a warrant for exercising power of entry with his amendment 50. I assure him that clause 152 modifies the Gas Act 1986 by building on existing provisions concerning the powers of entry. As such, the existing rules on powers of entry will continue to apply, whereby gas transporters must obtain a warrant from the magistrates court before use. I hope that satisfies my hon. Friend.

I thank my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) for her amendment today. I pay tribute to her for her outstanding work, her support for this Bill during her time as Secretary of State in the Department for Business, Energy and Industrial Strategy and her continued work when she was chair of the departmental Back-Bench committee. I am delighted to be able to confirm that we will continue to work towards what her amendment seeks to do, and I am happy to continue to work with her in pursuance of that, alongside the industry and the Department.

It would be remiss of me not to mention and thank my right hon. Friends the Members for Reading West (Sir Alok Sharma) and for Middlesbrough South and East Cleveland (Sir Simon Clarke) for their close work with the Government over recent weeks. Onshore wind is an important part of our energy mix, and the Government have always maintained that it should be built where there is local support, ensuring that the voices of local communities are heard. In December last year, the Government consulted on changes to national planning policy for onshore wind in England. Through that consultation, the Government have heard the strength of feeling and the range of views on this topic. We continue to believe that decisions on onshore wind are best made by local representatives who know their areas. Nevertheless, the feedback was clear that we need to strike the right balance, and that is why the Secretary of State for Levelling Up, Housing and Communities published a written ministerial statement, as was described earlier, and we look forward to working with colleagues to implement that as we move forward.

I would also be remiss not to mention my right hon. Friend the Member for Basingstoke (Dame Maria Miller) and her comments today and constructive engagement over the past few months. Lithium-ion battery storage systems are a concern for many in this House. The Government acknowledge the concerns surrounding the potential safety and environmental impact of battery energy storage at grid scale. It is a priority for this Government to ensure the existence of an appropriate, robust and future-proofed regulatory framework that protects people and the environment. That is why I am pleased to confirm today that we have sought to provide further clarity through both the planning system and environmental permitting regulations.

The Government have recently updated planning practice guidance, which encourages battery storage developers to engage with local fire and rescue and local planning authorities to refer to the guidance published by the National Fire Chiefs Council. The Government intend to consult on including battery storage systems in the environmental permitting regulations at the earliest opportunity.

The main mechanisms for controlling emissions to air, land and water from industrial installations is through complying with an industrial installations permit. These permits set out mandatory conditions that operators must comply with to protect the health of local communities and the local environment. Installations are then inspected at a frequency according to their level of risk, and regulators have enforcement powers available to them if operators are not complying with their permit conditions. I hope that my right hon. Friend and other hon. and right hon. Members for whom this is an issue of great concern are reassured by those commitments today.

I thank all hon. and right hon. Members for their engagement in this debate, especially my hon. Friend the Member for Banff and Buchan (David Duguid), who is a real champion of the UK’s thriving CCUS industry. I thank him for his comments today. The licences issued by different authorities are designed to serve different purposes. The new requirement for an economic licence recognises the monopolistic nature of carbon dioxide pipelines and storage and is designed to protect users of the networks from anti-competitive behaviours, including monopolistic pricing. This is complementary, rather than duplicative of the existing carbon storage licensing framework. I can reassure my hon. Friend that the provision in clause 128(1)(a) is sufficiently broad to cover all methods of CO₂ transportation.

Finally, my hon. Friend spoke about offshore wind. As part of the development consent process, applicants are required to consult with stakeholders, including devolved Administrations where relevant, and consider the impacts of their development on other sea users. However, I am also happy to confirm that I will meet him at any time, as well as representatives of the fishing industry, for whom this is a big issue.

I thank Members across the House for their considered contributions. For the reasons that I have set out, I respectfully ask them not to press their amendments to any votes.

Question put and agreed to.

New clause 52 accordingly read a Second time, and added to the Bill.

Planning and Solar Farms

Andrew Bowie Excerpts

Wednesday 19th July 2023 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Ms Nokes, and to respond to this incredibly important debate. It is incredibly important. I represent a vast 1,900 square-mile rural constituency, so I understand the pressures that are being felt in many of the constituencies represented here today.

I thank my hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson) for securing this debate. Let me say in advance that if I am unable to answer any of her questions today, I will get back to her at a later stage and will ensure that Ministers in the Department for Levelling Up, Housing and Communities and the Department for Environment, Food and Rural Affairs do so as well. I also thank my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) and my hon. Friends the Members for St Ives (Derek Thomas), for North Wiltshire (James Gray), for Penrith and The Border (Dr Hudson) and for Central Suffolk and North Ipswich (Dr Poulter) for taking part. I also thank the hon. Members for Strangford (Jim Shannon) for Tiverton and Honiton (Richard Foord) for taking part. It is especially good to see one of my predecessors, the right hon. Member for South Holland and The Deepings (Sir John Hayes). It is always nerve-racking when a predecessor comes into the room, but I thank him for his kind words and assure him that he has left some big shoes to fill in the Department.

I assure everybody here that sustainability remains at the heart of the Government’s ambition for development. That includes the protection of the environment and local communities. Energy security, food security and protecting our environment are some of the key challenges we face in the UK. Meeting these goals is urgent and of critical importance to the country. We believe they can be achieved together for the United Kingdom. We believe that solar energy will continue to play a key role in helping to secure greater energy independence while building a more sustainable and greener future for generations to come.

However, the Government recognise that solar farms, as with any new infrastructure, will have local impacts. It is therefore essential that we have a robust planning system that not only helps to deliver energy security but protects the environment and local communities and supports wider Government ambitions, such as food security. As several hon. Members have pointed out, and has been pointed out to me in the past, we are not able to create new prime agricultural land.

The dramatic rise in global energy prices following the covid-19 pandemic and Russia’s invasion of Ukraine has emphasised the urgency of the need to build a strong, home-grown renewable sector. Solar energy is key to achieving this. Solar farms are one of the most established renewable energy technologies in the UK and the cheapest form of electricity generation. We have seen an increase in the number and size of developments coming forward and expect this trend to continue. In the net zero strategy, the Government committed to installing up to 70 GW of solar capacity by 2035. That represents a fivefold increase in our current capacity, and we need to maximise the deployment of all types of solar to achieve this ambitious target.

It is important to stress that this does not mean seizing large swathes of the countryside and turning them into industrial solar farms and storage units. Yes, ground-mounted solar will be needed, but smaller-scale commercial and domestic rooftop projects will be just as essential, if not more so. The Government believe that solar and farming can be complementary, supporting each other financially, environmentally and through shared use of land. Therefore, we seek solar deployment across the UK, looking for development mainly on brownfield, industrial and low and medium-grade agricultural land, and we encourage solar technology that delivers environmental benefits, with consideration for ongoing food production or environmental improvement.

I will come on to planning for solar farm developments, but I listened with interest to the hon. Member for Tiverton and Honiton (Richard Foord). As we could not know from his contribution, I looked up the Liberal Democrat policy on planning for solar farms. Some people listening in Somerton and Frome might be interested to learn that the Liberal Democrats’ plan is to remove restrictions on new solar and wind to accelerate the deployment of renewable power across the country. They want to remove some community input into the planning process for new solar deployment, which is certainly not the position of His Majesty’s Government.

Planning applications for solar developments below 50 MW capacity are determined by local planning authorities—in the case of the hon. Gentleman, it would be the Liberal Democrat-run authority in Devon—through the Town and Country Planning Act 1990, and in accordance with the national planning policy framework and the relevant planning policy guidance.

[Dr Poulter]

I thank my hon. Friend the Minister for highlighting the role of local authorities in determining some of the lower-output solar farms. East Suffolk Council is run by a Green-Liberal Democrat coalition, which has already given the green light to developers and controversial developments in Framlingham. What reassurance can he give my constituents that the Government will make sure that controversial applications for solar farms are not green-lighted by local authorities?

[Andrew Bowie]

I will come on to the role that the Government play in the planning process. It is really important that local authorities—be they Liberal Democrat, Green, Conservative or Labour-run—take into consideration and listen to communities when they have expressed deep concerns about the deployment of solar farms or, indeed, other energy infrastructure projects that may be planned for those constituencies. I urge those listening to the debate to hear that message, and I urge Members present to ensure that party colleagues of theirs who run rural local authorities also hear it loud and clear.

Planning applications for solar farms with over 50 MW capacity are decided by the Secretary of State through the nationally significant infrastructure project regime, in accordance with national policy statements on energy. There are currently no operational projects of that size in England. However, there are 23 projects currently in the planning system, with the latest—the Longfield solar farm near Chelmsford—gaining consent from the Secretary of State just last month, ahead of the statutory decision deadline.

[Matthew Pennycook]

The problem of clustering has been raised several times. The Government recognise that as a problem, and we certainly think it needs to be looked into. Is the Minister able to give us a sense of why the Government did not include in in their NSIP reform action plan, published earlier this year? It was silent on the issue, despite the Government recognising it. Why is that?

[Andrew Bowie]

I will endeavour to get an answer to the hon. Member’s question from the relevant Government Department, and I will ensure that it gets to him as speedily as possible after the conclusion of the debate.

[Alicia Kearns]

My hon. Friend the Minister has just made the point that 23 planning applications are currently in the NSIP process. As far as I understand it, not a single proposal has been turned down yet by the Government. Does that mean that, no matter what, NSIP projects will be given the green light to go ahead, even if the Planning Inspectorate blacks out MPs’ responses and all sorts of other things? Are the projects genuinely being looked at on a case-by-case basis, or will we just green-light any NSIP project to get more green energy?

[Andrew Bowie]

Absolutely not. There is no automatic green-light system, and I am assured that every proposal is looked at on a case-by-case basis and on its merits, taking into account the opinions and concerns of the local communities it will affect.

The NPPF makes it clear that local planning authorities should have a positive strategy for producing energy from renewable and low-carbon sources, such as solar farms. It sets out that where a significant development of agricultural land is shown to be necessary, areas of poorer quality should be used in preference to those of higher quality. If it is proposed to use any land that falls under Natural England’s BMV classification—best and most versatile agricultural land—that needs to be justified during consideration of the planning application. As defined in the NPPF, “best and most versatile agricultural land” constitutes land in grades 1, 2 and 3a of the agricultural land classification planning decisions, and decisions should continue to be made based on that definition. However, I have heard the concerns raised by hon. Members, and I will ensure that DLUHC Ministers are made aware of them.

[Sir John Hayes]

I know time is brief, but can we take it that there is a presumption against development on prime agricultural land—certainly grades 1, 2 and 3a? I take the point about 3b, but let us just deal with the first three. Is there a presumption against the kind of development that takes valuable land out of food production?

[Andrew Bowie]

My right hon. Friend will have heard my earlier contributions. We are determined to ensure that land is protected for food security reasons and that this green and pleasant land that we are all so proud to represent continues to be just that. However, I understand the concerns of right hon. and hon. Members, so I will ensure that DLUHC Ministers hear them loud and clear.

Before I conclude, I will briefly turn to the issue of slave labour and China. My hon. Friend the Member for Rutland and Melton knows my personal position on the issue, and the Foreign, Commonwealth and Development Office will have heard loud and clear her representations here today. We are supporting the UK solar industry’s main trade association, Solar Energy UK, in leading the response from business to include securing the solar panel industry’s commitment to a robust supply chain traceability protocol, supporting a global co-ordinated response from the solar industry—the Solar Stewardship Initiative—and communicating relevant UK and international human rights frameworks. I will meet my hon. Friend in due course to discuss her proposed new clause to the Energy Bill.

I am grateful to all right hon. and hon. Members for attending today and to my hon. Friend the Member for Sleaford and North Hykeham for securing this important debate. I will of course ensure that DLUHC and DEFRA Ministers are made aware of the issues and serious matters raised this afternoon. We are committed to reforming policy so that it continues to complement wider Government ambitions: food security and preserving agricultural land, reforming the infrastructure planning system that focuses on improving community engagement, and introducing a new framework of environmental assessment through DLUHC’s Levelling-up and Regeneration Bill. I once more thank everybody for their contributions this afternoon.

[Caroline Nokes (in the Chair)]

I call Caroline Johnson to wind up.

Energy Infrastructure

Andrew Bowie Excerpts

Wednesday 5th July 2023 Commons Chamber

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

It is a pleasure to close this debate for the Government. I thank my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) for securing it, for his work as Chair of the Welsh Affairs Committee, which has contributed to the debate on energy in the round by producing a comprehensive and thorough report on energy in Wales, and for his description of the issue’s importance at this moment.

This is a very exciting and challenging time for all involved in the energy debate, which is probably why 17 Members, including 13 Back Benchers, have taken part in this debate. They all made insightful and useful contributions, and they are all engaging not only with the Department but with the various industries, companies and sectors that are active in their respective constituencies across the UK. We are undertaking a whole United Kingdom effort right now.

The United Kingdom’s energy infrastructure is at the core of our journey towards achieving net zero by 2050, reducing our reliance on imported fossil fuels and ensuring affordable energy for our citizens. We find ourselves facing the unprecedented task of transforming our infrastructure, including electricity generation, hydrogen production and energy networks among other areas. This transformation is vital not just for a huge range of sectors but for the nation as we improve our energy security following the events of the past 18 months.

Delivering on our commitments on both energy security and net zero necessitates the development of new transmission network infrastructure throughout Great Britain, both onshore and offshore. This grid transformation must, as the hon. Member for Southampton, Test (Dr Whitehead) said, be carried out swiftly, given the projected doubling of overall electricity demand by 2050. Members are acutely aware of the scale and importance of this challenge, as are the British Government. Furthermore, this transition also comes with major economic opportunities for green growth and green jobs, which we are determined to seize. Together with partners in industry, Ofgem and others, we are working to deliver this once-in-a-lifetime transition while ensuring that we all feel its benefits.

I had hoped for a damascene conversion on the Floor of the House by the hon. Member for Kilmarnock and Loudoun (Alan Brown), but he continues to disappoint by refusing to countenance the prospect of new nuclear projects north of the border in Scotland. I am incredibly proud to be this country’s first ever Minister for nuclear. However, it saddens me deeply that we will not see any development of new nuclear projects in the country I come from because of the luddite policy of the SNP and its partner in Government, the Green party.

Nuclear provides clean, affordable and secure energy, and the sector is of paramount importance as it underpins the whole economy. We have a diverse mix of low-carbon generating technologies in the UK and, along with investing in new technologies to lead the global mission to tackle climate change, new nuclear has an important role to play in reducing greenhouse gas emissions by 2050. That is why next Thursday, with great pride, we will be launching Great British Nuclear and beginning the down-selection process to ensure this country invests in the small modular reactor technologies that will help us to deliver our projected target of 24 GW of nuclear power on the grid by 2050.

I now turn to some of the contributions to what has been, overall, a very positive debate. My right hon. Friend the Member for Preseli Pembrokeshire opened the debate by describing the situation we face right now and what we have to do to tackle it. He also spoke about how this moment is both exciting and challenging. I can confirm that I have already met the Crown Estate to discuss how we can work much better together. He also raised the important issue of skills, which are the biggest challenge we face in delivering all the projects we seek to deliver over the next few years. That is why I have already instigated work between my Department, the Department for Education, the Department for Work and Pensions and, crucially, the Ministry of Defence, so that we can all work together to improve the skills base and to ensure that the next generation have the skills they need to contribute to the energy revolution this country is undergoing.

The newly independent hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) contributed to the debate, as the Chairman of the Select Committee. He made an interesting contribution about hydrogen and, as I often do, I agreed with him, as he yet again hit upon the importance of hydrogen to the wider energy mix in the future.

My hon. Friend the Member for West Bromwich East (Nicola Richards), a great champion of the west midlands in general, was right about Labour’s energy surrender policy. We have an energy security strategy, whereas Labour has an energy surrender policy, presumably written by Just Stop Oil. It has contributed £1.4 million to the Labour party in recent years, which is important to this debate. She was also right to highlight the company in her constituency, Enfinium, and others in the west midlands that are working hard to contribute to the new technologies we are going to have to harness in this revolution.

Let me turn to the comments about carbon capture, usage and storage. It is an important part of the debate and it was discussed by my hon. Friend the Member for Great Grimsby (Lia Nici) and the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy). CCUS technologies have the potential to accelerate our decarbonisation across the UK, but especially in the Humber region, as has been said. We selected the east coast cluster as part of the CCUS programme’s track 1. We will launch a process later this year to enable the expansion of track 1 clusters, including on the Humber. We also set out our view that the Viking transport and storage system, given its maturity, is one of those best placed to deliver Government objectives for track 2. We will provide an update on track 2 in the summer.

[Emma Hardy]

I thank the Minister for that informative response. Will he emphasise that although the Viking project is crucial, two pipelines are needed in the Humber, one at Easington and one at the south? To meet our net zero target, we would need to deliver both. Will he briefly comment on the other pipeline, as well as the Viking project?

[Andrew Bowie]

Given the limits on time, I will not. However, I commit to meeting the hon. Lady and other Members from the Humber region—or one of my ministerial colleagues will do so—to discuss how we can move those projects forward at a pace that she would find acceptable and that would be beneficial to the Humber region.

My hon. Friend the Member for Ynys Môn (Virginia Crosbie), who is such a champion not just her constituency but for the nuclear industry in general, raised the prospect of the innovations and investment that we are taking forward and making in nuclear. I look forward to having many more conversations with her in the months and years ahead, as we get Great British Nuclear off the ground, begin our down-selection process and then move forward to further gigawatt projects later on.

The only problem with the comments made by the hon. Member for Bath (Wera Hobhouse), which were well informed, was that they were so negative. As my hon. Friend the Member for Stroud (Siobhan Baillie) pointed out, we cannot meet doom with doom—we have to be positive about the benefits to our economy, this country and the environment that will be brought by this energy revolution. I am very positive, as are this Government. For those who think that this Government are complacent, let me say that this Prime Minister and this Government created the Department for Energy Security and Net Zero, we are leading the G7 on cutting carbon emissions and we are launching new nuclear programmes, as well as investing in new technologies across the piece. This Government are not complacent: we are tackling the challenges head-on and we are growing the economy in the process of doing so.

[Alan Brown]

Will the Minister give way?

[Andrew Bowie]

I will not, sorry.

My hon. Friend the Member for Mole Valley (Sir Paul Beresford) was right to raise the prospect of fusion and the transformative impact it will have. As has been said today, and as everybody says, fusion is always seen as being 20 years away. I can inform the House that we are looking to have the first commercial fusion reactor on the grid in this country by 2040. We are absolutely leading the world in this regard. It is fascinating to go up to the Culham centre to see the developments that are taking place and the science that is happening on that site. I cannot wait to see the developments at the West Burton site in Nottinghamshire as we move towards commercialisation at scale.

We heard contributions from the hon. Member for Stockton North (Alex Cunningham), my hon. Friend the Member for Peterborough (Paul Bristow), the hon. Member for Ceredigion (Ben Lake), my hon. Friend the Member for North Devon (Selaine Saxby), the hon. Member for North West Leicestershire (Andrew Bridgen), my hon. Friends the Members for Stroud and for Great Grimsby, and the hon. Members for Kilmarnock and Loudoun (Alan Brown) and for Southampton, Test (Dr Whitehead). It has been a very positive debate overall. I am pleased to have been able to respond on behalf of the Government. I am very committed to leading the change that is required to our networks, infrastructure and national grid, and in bringing forward the new technologies. We are proud to lead the world in ending contributions to climate change, as is demonstrated through our commitments to building a new energy infrastructure on a scale never seen before in Great Britain. Our strategy supports our ambitions for green growth and jobs, and will ensure that our energy infrastructure is secure and resilient, and delivers value for money to consumers, while delivering on our net zero target.

[Mr Deputy Speaker (Mr Nigel Evans)]

With the leave of the House, I call Stephen Crabb to wind up briefly.

Oral Answers to Questions

Andrew Bowie Excerpts

Tuesday 4th July 2023 Commons Chamber

[Dame Maria Miller (Basingstoke) (Con)]

3. What assessment he has made of the adequacy of regulations for industrial lithium-ion battery storage facilities.

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

It is a priority for this Government that all net zero energy infrastructure is built, operated and maintained in an appropriate and safe way. My officials work closely with the industry-led electricity storage health and safety governance group to ensure an appropriate, robust and future-proofed health and safety framework is sustained as storage deployment increases.

[Dame Maria Miller]

We need to increase power storage, but the potential fire risks associated with lithium-ion battery storage facilities are now becoming widely acknowledged. What is my hon. Friend doing to ensure those facilities are not built in inappropriate locations, such as Basing Fenn in my constituency, which is a site sandwiched between a rare north-flowing, salmonid chalk stream and a hospital?

[Andrew Bowie]

I thank my right hon. Friend for her question and her tireless campaigning on this important issue. As I discussed in that very positive meeting that I had with her yesterday, I have been working with colleagues across Government to establish the appropriate treatment of these facilities in planning and environmental regulation. Every site should be considered on its own merits and is a decision for our local authorities.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will this Government stop chuntering on about batteries and battery storage all the time? Will they get down to JCB and see its innovative new hydrogen fuel car and heavy goods vehicle? Is it not about time that we realised that hydrogen is the future and that this Government should be building a pipeline of hydrogen throughout the country?

[Andrew Bowie]

I will not be drawn on chuntering on by the hon. Gentleman, but let me just say that it was this Government who allowed JCB to proceed with that technology and to develop it at commercial scale. I am pleased to tell him that the Secretary of State will be visiting imminently.

[Stephen Kinnock (Aberavon) (Lab)]

4. What steps he is taking to help increase the potential benefits of floating offshore wind for the supply chain.

--- Later in debate ---

[Alexander Stafford (Rother Valley) (Con)]

5. What steps his Department has taken to ensure local community engagement in onshore wind proposals.

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

The Government want communities to participate in and benefit from onshore wind proposed in their local area. On 11 May, the Government issued a consultation for onshore wind partnerships in England, proposing improvements to the current system of community engagement and benefits.

[Alexander Stafford]

Some energy firms give discounts to those who live near onshore wind farms when the wind blows. Unfortunately, though, that is not the case everywhere. Will the Minister look again at this policy nationally so that my constituents, such as those who live in Ulley near Penny Hill wind farm, and even myself—I live in Harthill near Loscar wind farm—will see the benefits of clean, green wind power reflected in their energy bills?

[Andrew Bowie]

The consultation on onshore wind partnerships proposed that the Government work with RenewableUK to update the industry-wide community benefits protocol for onshore wind in England. An updated protocol would seek to encourage more innovative approaches, for example through developers supporting local energy bill discounts. The consultation closes on 7 July.

[Anna McMorrin (Cardiff North) (Lab)]

I am not sure there is much point in community engagement when there is no onshore wind. We do not have any onshore wind. Last week, we heard the Climate Change Committee’s devastating report on this country’s commitment to net zero. When will this Government unlock the barriers to onshore wind?

[Andrew Bowie]

I completely refute the suggestion that we have no onshore wind. Onshore wind contributes 14 GW of power to the UK’s national grid as we speak, and of course we support the deployment of onshore wind with communities.

[Mr Speaker]

We come now to the shadow Minister.

[Andrew Bowie]

I will take no lectures from the Labour party on developing renewable electricity. When Labour left office in 2010—[Interruption.] They do not like to hear this, but when Labour left office in 2010, less than 7% of the grid was accounted for by renewables. Now it is 43%.

[Dr Whitehead]

I think maybe the Government should take lessons from Labour. It is now generally understood that the Government consultation is likely to lead to only minimal relaxation of planning rules and that onshore wind will effectively remain banned. Tory peer Lord Deben, chairman of the Climate Change Committee, said of the consultation on Saturday that it is simply unacceptable that the Government are still discussing whether they are in favour of onshore wind or not when it is widely recognised as one of the cheapest forms of energy generation. He is right, is he not?

[Andrew Bowie]

I really wish the Labour party would stop talking down what we are doing on renewable electricity. I remind the House that the consultation on onshore wind finishes on 7 July.

[Mrs Heather Wheeler (South Derbyshire) (Con)]

6. What assessment his Department has made of the adequacy of additional support for energy and trade intensive industries.

--- Later in debate ---

[Clive Efford (Eltham) (Lab)]

7. What discussions he has had with the Secretary of State for Levelling Up, Housing and Communities on the adequacy of the planning system for clean energy projects.

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

My Department has been working closely with the Department for Levelling Up, Housing and Communities on delivering the proposals in the published action plan for reforming and speeding up the nationally significant infrastructure project planning process. An important part of those reforms involves updating and strengthening the national policy statements for energy.

[Clive Efford]

Last weekend, James Robottom, the head of onshore wind at RenewableUK, said that he does not expect much from the Government’s consultation on planning. He said that obstacles to new onshore wind development would

“severely hinder investment in the onshore wind industry and its supply chain due to the high level of risk and uncertainty they create. We are being denied the opportunity for thousands of new jobs and billions in private investment”.

In the meantime, that is costing English families £180 per year. It means damage to the economy, damage to the environment, and higher bills for families. Is it not time that we got this useless Government out of the way so that we can sort it out?

[Andrew Bowie]

This useless Government who have delivered 43% renewables on to the grid! I would much rather take our record on renewables than the Labour party’s any day of the week. The consultation on national policy statements closed, as the hon. Gentleman knows, on 23 June, and the Government remain on track to present them to Parliament and bring them into effect by the end of 2023.

[James Gray (North Wiltshire) (Con)]

Local authorities have a presumption in favour of solar, and quite right, too, but should they not also consider the cumulative effect of solar farms? Wiltshire is the second largest county in England for solar farms. If the new Red Barn project at Kington St Michael is added, it will be one of the largest solar farms in Britain. We are covering our good agricultural land with solar farms in counties such as Wiltshire. When the forthcoming planning policy guidance is reconsidered, will the Minister undertake to include a presumption against solar farms on grade 3a and 3b agricultural land?

[Andrew Bowie]

Food security is incredibly important, and we will, of course, prioritise less productive land for the deployment of solar farms. Our reforms aim to ensure that infrastructure developers consider, at the outset of their programmes, how projects can address the legitimate concerns of affected communities, engaging regularly with them throughout the pre-application phase and beyond. Engaging with statutory consultees early during the pre-application stage will also benefit local communities and farmers through high-quality applications.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

8. What recent assessment he has made of the impact of ending gas imports from Russia on energy security.

--- Later in debate ---

[Mr Ben Bradshaw (Exeter) (Lab)]

13. What steps he plans to take to support the development of community energy projects.

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

The Government are supporting local authorities and community energy groups to work together to develop projects within UK growth funding schemes, such as the UK shared prosperity fund. Ofgem also welcomes funding applications from the sector to the industry voluntary redress scheme.

[Mr Bradshaw]

Why did the Government remove amendments from the Energy Bill last week that would have supported community energy and local energy trading?

[Andrew Bowie]

As we have outlined previously, the Government do not support the amendments that were tabled in the Lords, and believe that the issues raised should be considered as part of wider market reform. However, we are proactively working with parliamentarians and the community energy sector to discuss whether further support from the Government for the sector is needed, and if so, what might be feasible.

[Anna Firth (Southend West) (Con)]

15. What energy cost support his Department has provided to customers on traditional prepayment meters.

--- Later in debate ---

[John Spellar (Warley) (Lab)]

19. When his Department plans to complete its competitive process for small modular nuclear reactor technologies.

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

I am pleased, and indeed proud, to say that Great British Nuclear will be holding a competition for small modular reactors, because we want to attract the best designs from both domestic and international vendors. The Government’s ambition is to select the leading technologies by autumn, providing co-funding to any viable new technology. Our commitment to a nuclear programme and to Great British Nuclear will enable the UK to be on a path to achieve its ambition to become a global leader in nuclear energy and small modular reactors.

[Mr Roberts]

As members of the Welsh Affairs Committee heard during a visit to the United States in January, small modular reactors should play a significant role in transition, alongside large-scale nuclear projects. Does the Minister agree that while north-west Wales has excellent scope for large-scale projects, parts of north-east Wales would be outstanding prospects for an SMR site, as well as capitalising on the region’s amazing manufacturing and engineering capabilities to drive that part of the energy mix forward?

[Andrew Bowie]

The Government recognise the support for nuclear power across north Wales. Great British Nuclear will work with the Government on access to potential sites for new nuclear projects to achieve our long-term ambition. As a first step towards the development of the new national policy statement for nuclear, we will consult later this year on a proposed way forward for determining how new nuclear developments, including SMRs, might be located.

[John Spellar]

The Minister will know that this country has been producing small nuclear reactors for our submarines for more than 50 years. Does the Minister understand that while he is dithering around with his time-wasting international competition, those international competitors are out there in the market getting the orders and selling, backed to the hilt by their own Governments? Is this going to be yet another great British development created by our scientists, engineers and skilled trades, but allowed to slip away by blinkered civil servants and weak Ministers who cannot make a decision?

[Andrew Bowie]

Rolls-Royce is a great British company, which is why we previously made up to £210 million available from the advanced nuclear fund to Rolls-Royce SMR Ltd to support the development of its small modular reactor design. Great British Nuclear will launch the first-stage selection process for small modular reactors, which is expected to attract the best designs from domestic and international vendors, which will be great for this country. By the way, we are going three times faster than any comparable country on this project.

[Hannah Bardell (Livingston) (SNP)]

18. What plans he has to support households with energy costs in winter 2023-24.

--- Later in debate ---

[Mark Fletcher (Bolsover) (Con)]

T2.   Our domestic nuclear sector and our military are struggling to recruit and retain enough nuclear engineers. What discussions is the Minister having with the sector and the Department for Education to create a long-term workforce plan to solve the issue?

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

Since day one, the skills challenges that we face have been a top priority for me, which is why my Department is working closely with the Ministry of Defence, the DFE and the sector to tackle them. With the employer-led Nuclear Skills Strategy Group, we have deployed a joint plan of skills actions to support the civil and defence programmes, but I would be happy to meet my hon. Friend to discuss that further.

[Mr Speaker]

I call the shadow Secretary of State.

--- Later in debate ---

[Andrew Bowie]

It was this Prime Minister who created the Department for Energy Security and Net Zero, and it is this Government who have delivered more than 43% renewable electricity on to the grid. We will take no lectures from the Labour party on combating climate change.

[Lia Nici (Great Grimsby) (Con)]

Will my hon. Friend please outline what his Department is doing to look at the import of green hydrogen feedstock into the UK, to increase the scale and speed of the UK industry and help us achieve our 10 GW capacity by 2020?

--- Later in debate ---

[Andrew Jones (Harrogate and Knaresborough) (Con)]

Unlocking access to the grid will unlock significant private sector capital ready to come in for microgeneration of battery storage projects. Can my hon. Friend give me an update on the timing for the Winser review and the Government’s response to it?

[Andrew Bowie]

The Government have received Nick Winser’s review and it will be published imminently.

[Dame Nia Griffith (Llanelli) (Lab)]

Following a debate in Westminster Hall on making heritage buildings more sustainable, will the Secretary of State undertake to meet his colleague the Minister with responsibility for culture to push for the urgent revision of guidelines to allow greater flexibility in the siting of solar panels and other renewable installations on heritage buildings, in order to make them more environmentally sustainable and economically viable?

--- Later in debate ---

[Mr Gregory Campbell (East Londonderry) (DUP)]

The Secretary of State outlined the progress being made on small modular nuclear reactors. Can he provide an estimate of how many there might be within 10 years?

[Andrew Bowie]

Great British Nuclear will be launched later in July. We will also be launching the draw-down selection process for which technologies we will invest in and support. I would be delighted to speak to the hon. Gentleman in more detail about that progress moving forward.

[Patrick Grady (Glasgow North) (SNP)]

I think my constituents, not least those who are part of the Glasgow Community Energy co-operative, will be disappointed with the Minister’s answer to the right hon. Member for Exeter (Mr Bradshaw). The Minister is extremely familiar with the clauses that form part of the proposed community energy Bill. They are not acceptable as amendments to the Energy Bill before this House. Will the Government bring forward their own amendments, so that community energy groups can have the confidence they need to take forward their projects?

[Andrew Bowie]

As I said, we are working with the sector and parliamentarians to find a way forward to further support community energy projects. As part of that, I would be delighted to meet the hon. Gentleman to discuss it further.

Draft Electricity and Gas (Energy Company Obligation) Order 2023

Andrew Bowie Excerpts

Monday 3rd July 2023 General Committees

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

I beg to move,

That the Committee has considered the draft Electricity and Gas (Energy Company Obligation) Order 2023.

It is a pleasure to serve under your chairmanship this afternoon, Mr Dowd. The draft order was laid before the House on 24 May.

Since the energy company obligation scheme was introduced in 2013, it has ensured that about 2.4 million predominantly low-income households have received much-needed support to improve the energy efficiency of their home, with more than £19 billion-worth of savings for households over the lifetime of the measures installed. The Government committed, in the growth plan 2022 and the energy security plan, to placing a new obligation on energy suppliers to deliver vital energy efficiency upgrades, helping hundreds of thousands more households to take action to reduce their energy bills by making their homes cheaper to heat.

The draft order will deliver on those commitments by introducing a new energy company obligation, the Great British insulation scheme, to run until March 2026. Alongside that, it will introduce small additions to the existing ECO4 scheme, providing heating support for certain households that are not currently eligible for these measures.

I turn to the detail of the order. It will establish the Great British insulation scheme in law as a complement to the existing energy company obligation scheme, ECO4, in Great Britain. Its main provisions are an additional energy company obligation to run from 2023 to 2026, boosting previously planned energy efficiency investments by another £1 billion across this period; a focus on the rapid installation of the most cost-effective single insulation measures; and the extension of support through the ECO schemes to a much wider group of households living in the least energy-efficient homes in the lower council tax bands, which are also now challenged by higher energy bills.

The Great British insulation scheme will boost further the support already available through ECO4 that targets low-income and vulnerable households—those most at risk of being in fuel poverty. Energy suppliers must deliver at least 20% of the new help available through the scheme to those households. That low-income group will include those on means-tested benefits, as well as households in the least energy-efficient social housing. Fuel-poor homes in the private rented sector will benefit, too. That builds on the provisions of existing regulations.

Working alongside the low-income minimum, the scheme’s flexible eligibility provisions will offer additional routes to reach those who are on low incomes or in other ways vulnerable, such as through ill health, but where households may not be in receipt of benefits. The flexible eligibility provisions will enable local authorities, energy suppliers, Citizens Advice and the NHS to work together to help those most vulnerable to the effects of living in a cold home.

As with previous ECO schemes, the obligation will be set based on annual bill savings. That incentivises energy suppliers to target those homes where the savings from energy-efficient measures will be greatest; they will also be installing the measures that will have the greatest impact. The scoring approach for this will mirror the approach used for ECO4, minimising complexity and any bureaucracy for industry. Installation quality will be governed and assured under TrustMark’s compliance and certification framework. The quality of installations, alongside a whole assessment of the property, will continue to rely on independent industry standards: PAS—publicly available specification—2030 and PAS 2035.

The draft order will also add to the circumstances in which some heating measures, in particular solar PV and electric heating, can be available for households in the existing ECO4 scheme.

We estimate that as a direct result of the boost provided by the Great British insulation scheme, about 376,000 measures will be installed in around an additional 315,000 homes. That is expected to save households on average £300 to £400 per year.

To help to insulate as many homes as possible before next winter, the draft order will permit measures installed since 30 March to count towards the suppliers’ obligation target. This provision was signalled to energy suppliers in the Government response to their earlier consultation on scheme design; the response was published on that date. The Government consultation was conducted towards the end of 2022. The scheme design encapsulated in the draft order takes forward the main provisions set out in the consultation. The majority of consultation responses supported the proposals, including as central features the extension of energy efficiency help to the wider household group and a focus on the most cost-effective single insulation measures.

The Government are therefore proceeding with the main proposals, with some key changes considering the responses received and the final impact assessment. We have expanded the eligible council tax bands in Wales from bands A to C to bands A to E, better aligning with the proportion of eligible households in England and Scotland. We are requiring all measures to be installed with the PAS 2035 requirements, given the complexity of defining low-risk measures that could use any alternative standards. We have not implemented the proposal consulted on that suppliers must provide evidence that low-income households cannot meet the ECO4 scheme minimum requirements, to simplify administration.

We have ensured that households supported under the Great British insulation scheme will not be excluded from receiving future help under the ECO4 scheme where the eligibility criteria for that scheme are met. We will uplift scores on measures delivered to low-income rural off-grid households in Scotland and Wales, given the additional challenges that those households are likely to face. Equivalent households in England will be supported via the home upgrade grant. Recognising the value of innovation, those innovative products offering the greatest improvements and delivered to the low-income group will be eligible for both at 25% and 45% uplifts, subject to a cap.

The Great British insulation scheme will continue building on the successful ECO approach that has delivered energy efficiency measures to millions of households for the past decade. The scheme will extend help to hundreds of thousands more households previously ineligible for Government energy efficiency support. It will build momentum towards the Government’s ambition to reduce total UK energy demand by 15% from 2021 levels by 2030, and it is estimated that it will save more than 5 million tonnes of CO₂ emissions from the lifetime of the measures installed. It will empower thousands more people to insulate their homes, protecting the pounds in their pocket and supporting jobs across the country. I commend the draft order to the Committee.

--- Later in debate ---

[Andrew Bowie]

I thank both my counterparts. Obviously they have not spent enough time locked in a Committee Room over the past six weeks, so they wanted to come back for some more today. It is a pleasure to be back with them both this afternoon.

Improving the energy efficiency of our homes is the best long-term solution to reduce energy bills and therefore to tackle fuel poverty. That is why the Government have set a new and ambitious target to reduce final energy demand from buildings and industry by 15% by 2030, and are committed to ensuring that homes are warmer and cheaper to heat by investing £12 billion in Help to Heat schemes such as the home upgrade grant and the social housing decarbonisation fund. The Government remain committed to helping low-income and vulnerable households to reduce their fuel bills and heat their homes. The Great British insulation scheme will be a crucial element of that help over this winter and for years to come.

The hon. Member for Kilmarnock and Loudoun asked why a smaller number of all properties are projected to be insulated and why we are not focusing on solid wall insulation. The scheme will focus on the most cost-effective insulation measures to ensure that as many households as possible can receive support. Solid wall insulation remains eligible for the scheme, but as it is a high-cost measure, it is more likely to require a consumer contribution.

The Government are absolutely determined to reach our energy efficiency ambitions by 2030. We need to balance the ambition of the scheme with the impact of consumer bills and the ability for existing supply chains to deliver measures quickly. This Government are taking action now, led by the energy efficiency taskforce, and building on what has already been achieved through more efficient use of energy in the UK.

Let me address the points raised by the hon. Member for Southampton, Test. Why is the number of homes estimated to be upgraded through the insulation scheme lower than was originally estimated? Compared with the modelling undertaken for the consultation stage impact assessment, the final modelling has incorporated higher-measure cost assumptions. These updated cost assumptions were informed by independent surveys of installers and have been the primary factor in causing the estimated number of homes treated through the scheme to fall.

I accept the hon. Gentleman’s statement that ECO4A, ECO4+ and the GBIS are the same scheme. He asked whether a minimum of two standard assessment procedure band improvements would be required, which might create problems for the insulation scheme. The GB insulation scheme has no minimum improvement requirement; it will target the most cost-effective single measures to make the biggest difference to the most energy-inefficient properties.

Should we support fully those who are on the lowest incomes and are the most vulnerable? We want to extend support to a broader pool of households who are currently ineligible for support through existing schemes but are also likely to be struggling to pay higher energy bills. At least 20% of the obligation will focus on low- income households, targeting those on means-tested benefits, living in the least efficient social housing or referred by a participating local authority or energy supplier and considered to be on a low income or vulnerable. The remainder will be open to households in the lower council tax bands: A to D in England and A to E in Scotland and Wales, equivalent to EPC rating D to G.

Has a comparative assessment been made of the cost assumptions for the ECO4 scheme and of those set out in the Great British insulation scheme consultation? We are monitoring ECO4 delivery against the current cost assumptions and will consider changes if necessary. However, changing the cost assumptions may require either a change to the overall energy bill reduction target, the estimated funding scheme policy details or a combination of all three. Such changes would require public consultation, and possibly regulatory change.

[Dr Whitehead]

I think the Minister has just indicated, in his very last sentence, that another SI may be on its way. If so, what is the timescale?

--- Later in debate ---

[Andrew Bowie]

I would not want to commit either to another SI being on its way or to a timescale for that happening. However, as the hon. Gentleman has just heard me say, any changes would require possible regulatory change. He can take from that what he will.

I thank the hon. Members for Southampton, Test and for Kilmarnock and Loudoun for their contributions and for the points that they made, and I thank everybody else for turning up today. I recognise that there is agreement that the scheme should continue at this time, providing critical support to a greater pool of households challenged by higher energy bills. Once again, I commend the draft order to the Committee.

Question put and agreed to.

Energy Bill [ Lords ] (Eighteenth sitting)

Andrew Bowie Excerpts

Committee stage
Thursday 29th June 2023 Public Bill Committees

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

I beg to move, That the clause be read a Second time.

It is a pleasure to serve under your chairship, Mr Sharma. It is the first time, I think, that we have been in the room together for this Bill. New clause 86 requests that the UK Government commence withdrawal from the outdated investment provisions of the energy charter treaty, which risk undermining our Climate Change Act 2008 targets, internationally agreed emissions reductions and duties in this Bill in respect of the impact of energy production on habitats, species and the climate.

As many Committee members are aware, the energy charter treaty is an investment agreement between 50 countries for the energy sector. The investor-state dispute settlement mechanism in the treaty allows foreign companies to sue Governments outside the national legal system in somewhat secretive tribunals. The amounts at stake can be in the billions, and the ECT has already generated at least 135 claims, making it the world’s most litigated ISDS agreement. In the most recent Intergovernmental Panel on Climate Change report, UN climate scientists warned of the risk that ISDS agreements are

“able to be used by fossil-fuel companies to block national legislation aimed at phasing out the use of their assets”.

The report even name-checked the energy charter treaty, yet the UK continues to be party to it.

The treat is not just a potential risk. There have already been several high-profile cases of fossil fuel companies suing Governments through the treaty. For example, German energy giant RWE is suing the Netherlands for €1.4 billion over its coal phase-out. The UK oil company Rockhopper won a case this summer against Italy over a ban on offshore oil drilling. It won more than £210 million—more than six times what it had spent on the project. UK fracking firm Ascent Resources launched legal action against Slovenia over requirements for an environmental impact assessment, which is quite a benign ask of any project. It has also launched legal action over Slovenia’s subsequent ban on fracking, introduced by its Parliament, and that case is still pending.

The energy charter treaty poses a huge threat to climate action. As states take the necessary steps to phase out or phase down fossil fuels, more and more fossil fuel giants will turn to such mechanisms to sue Governments. It has been estimated that if the UK Government follow the International Energy Agency’s recommended pathway and cancel oil and gas projects that are in the pipeline, they could face claims of up to £9.4 billion from the ECT alone.

Globally, there is a risk of up to $111.5 billion in claims, but that is clearly not the only risk. The most recent IPCC report warns that there is a risk of regulatory chill from investment agreements, and again it particularly highlights the ECT. The fear of being sued is causing Governments to delay or decide against taking the necessary action on climate. Last year, two countries acknowledged that that is already happening.

Countries across Europe are seeing the risks for what they are and are already taking action. Towards the end of 2022, there was a cascade of announcements from countries planning to exit the ECT. Germany, France, the Netherlands, Spain, Poland, Slovenia, Luxembourg and Denmark all said that they are leaving, and Italy has already left. The European Parliament has voted for a co-ordinated withdrawal of all EU countries, and the European Commission is now recommending that as well, because reform of the treaty has not worked and will not work. Current proposals for modernising the treaty are weak and do not have the support of many countries. They will mean that existing fossil fuel projects will remain protected for at least 10 years, and that some gas projects will be protected until 2040. Projects that have just been given new or extended licences, such as the Cambo oilfield, will be protected and all existing projects can still continue.

Reform has ultimately been a failure, and exiting the treaty is now the only option. Germany, France, the Netherlands, Spain and Slovenia have all referred to the incompatibility of the ECT with the Paris climate agreement and climate goals, and the EU Council recently decided that it will not support reform. If countries exiting the ECT do so in co-ordination, as seems to be happening, they could agree between each other not to apply the 20-year sunset clause, as has been suggested by several countries that are leaving.

In June, the Energy Minister at the time, the right hon. Member for Chelsea and Fulham (Greg Hands), said:

“The UK cannot support an outdated treaty which holds back investment in clean energy and puts British taxpayers at increased risk from costly legal challenges.”

That was stated in a press release on 24 June 2022. Back then, the Government wanted to put their trust in the reform proposals to fix the problem, but we have since seen country after country doing its own assessment and concluding that reform is not possible or has failed.

If the UK does not step up and become part of the vanguard for exiting the ECT, it could be left behind in an obsolete and collapsing treaty, bearing all the risks while others move on. Put simply, while we are still members of the ECT we will not be able to achieve the aims of the Bill and meet our net zero obligations without facing huge costs from the agreement. A co-ordinated withdrawal is the most effective way to protect taxpayers’ money, the planet and our future from this damaging treaty, and I urge the Minister to have a rethink.

I will not push this probing new clause to a vote, but I hope that it will allow the Minister the opportunity to set out the Government’s position on this very important issue. It is right that it is considered in this debate, but I accept that I probably will not get the support of Government Members in a vote.

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

It is a pleasure to serve under your chairmanship, Mr Sharma, on the last morning that we gather together in this room to debate the Bill. I thank the hon. Member for Sheffield, Hallam for tabling her important new clause, which relates to an issue that I addressed in a Westminster Hall debate not that long ago.

The UK is committed to addressing the urgent need for climate action at home and abroad through our ambitious net zero targets and international commitments. The new clause would initiate procedures for the United Kingdom to withdraw from the energy charter treaty. His Majesty’s Government completely recognise that the treaty needs to be updated to reflect the current energy landscape, which is why we worked hard for two years at negotiating to modernise it; hence, the comments to which the hon. Lady referred—by the former Energy Minister, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands)—were absolutely correct.

We wanted to bring the treaty into line with modern energy priorities, international treaty practice and international commitments on climate change. Unfortunately, the European Union and its member states were unable to endorse the adoption of modernisation at the energy charter conference. Yes, the European Parliament has voted to update the treaty, and the European Commission is advising that member states or the organisation withdraw, but the EU Council was unable to reach an agreement on modernisation, which is why we are where we are today.

Since the energy charter conference, we have engaged with stakeholders across business, civil society and Parliament, and we are carefully monitoring the positions of the other contracting parties—including the countries to which the hon. Lady referred—and the EU, in relation to the adoption of modernisation. In a context that continues to develop near weekly, we are carefully assessing how to take forward our priorities in relation to the treaty, but we cannot accept the new clause, which would require the UK to initiate procedures to withdraw. As I said, we will carefully consider where we stand.

The new clause would also require the Government to lay before Parliament a report detailing UK investment treaties covering the energy sector and the risks that they pose to the Secretary of State fulfilling their duties under the Climate Change Act. The UK has investment agreements with around 90 trading partners, and the agreements are the responsibility of the Department for Business and Trade. The Government’s right to regulate in the public interest, including in areas such as the environment and labour standards, is recognised in international law, and the Government are clear that when negotiating trade and investment agreements we will continue to protect our right to regulate.

I hope that that provides the hon. Member for Sheffield, Hallam with the reassurance she needs, and I humbly ask that she consider withdrawing her new clause.

[Olivia Blake]

I thank the Minister for his response. He will not be surprised that I am not satisfied with it, but I will not press the new clause to a vote. There are many risks in this area. Other countries have already taken the lead, and we are being left behind, which exposes us to a higher level of risk. I hope that the Minister will not only continue to consider the modernisation of the ECT but consider withdrawing from it. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 87

Government support for community energy

“(1) Within three months of the passage of this Act, the Secretary of State must publish and lay before Parliament a report setting out the financial, policy and other support that the Secretary of State plans to make available to widen the ownership of low carbon and renewable energy schemes and increase the number of such schemes owned, or part owned, by community organisations.

(2) The report must set out—

(a) all policies, programmes or other initiatives with which the Secretary of State plans to support the development and construction of new low carbon community energy schemes;

(b) the level of financial support which will be made available for—

(i) the Rural Community Energy Fund,

(ii) the Urban Renewable Energy Fund, and

(iii) any other fund or support package designed to support the development of new low carbon community energy schemes;

(c) all policies, programmes or other initiatives the Secretary of State intends will increase community ownership of local low carbon energy schemes through shared ownership schemes;

(d) the steps the Secretary of State is taking to develop new market rules to make it easier for low carbon community energy schemes to sell the energy they generate;

(e) the number and the capacity of the new community energy schemes the Secretary of State expects to be constructed as a result of the measures set out in the report.

(3) Not less than twelve months after the publication of the report, and not later than the end of each subsequent period of twelve months, ending five years after the publication of the report, the Secretary of State must lay before Parliament and publish an assessment of the progress made by the policies, programmes and other initiatives set out in the report.

(4) The assessment must set out—

(a) the total amount of financial support provided by the policies in the report;

(b) the number and capacity of low carbon community energy schemes —

(i) completed, and

(ii) in development;

(c) the number and capacity of new shared ownership schemes;

(d) any changes the Secretary of State proposes to make to the policies, programmes and other initiatives included in the original report.”—(Olivia Blake.)

This new clause is intended to replace clauses 272 and 273, if those clauses are removed as indicated by Government Amendments 15 and 16. It would require the Government to report annually for 5 years on the support it is providing to Community Energy schemes and the number and capacity of such schemes that are delivered.

Brought up, and read the First time.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Mr Sharma. I want to say a few words in support of new clause 87. As the hon. Member for Sheffield, Hallam outlined, it is not even that onerous, as it is about reporting going forward, although I always find that clauses that require reporting still have the Government running a mile, because they do not like to commit to it.

Government Members voted to remove from the Bill clauses 272 and 273, which were in favour of community energy schemes and putting in place arrangements to procure them. The argument from the Minister was:

“Introducing a fixed price would be a step backwards, as it requires all energy consumers to pay more than the market price for electricity to subsidise local communities that benefit from community energy projects.”––[Official Report, Energy Public Bill Committee, 20 June 2023; c. 357.]

I do not think it is too onerous to ask all billpayers to help to subsidise a few community schemes. Will the Minister write to the Committee to outline what additional costs the Government think would go on to all billpayers’ bills if there was a fixed price guarantee for local energy schemes? It is really important that we understand what the Government think the extra costs would be for billpayers.

The Government happily tell us that the regulated asset base model in the Nuclear Energy (Financing) Act 2022 will add £10 to every single bill in the UK. If that is the case and it is okay for nuclear, why do they not look at what the costs and benefits overall for local community energy schemes would be? That is my main point.

Will the Minister also write to the Committee to outline the amount of community energy that has been deployed each year in the last decade? That will allow us to understand the trends and how easy it is for community energy schemes to access the grid and the system and whether there are any blockers.

Finally, perhaps the Minister does not need to write to us on this, but will he spell out what he thinks the flaws are now in the original Local Electricity Bill that he did not see at the time, when he signed up as a supporter and sponsor of the Bill? What are the defects, since he is now against such a concept?

[Andrew Bowie]

I thank hon. Members for their contributions, and especially the hon. Member for Sheffield, Hallam for tabling new clause 87, which seeks to create a new community energy strategy, to be followed up with annual reports to Parliament on progress for the sector. The Committee discussed community energy in great detail last week—and a very enjoyable debate it was too. I reassure the Committee that the Government are, as we speak, looking closely at this matter. I urge all Members to watch this space.

Nevertheless, I remind Members that the Government’s general approach to community energy is already laid out in the net zero strategy and the net zero growth plan. As such, we do not see any added value in mandating a dedicated community energy strategy or annual report in the manner set out in the new clause. Instead, we believe it is more beneficial to the community energy sector for the Government to continue our approach to help local authorities and community energy groups to work together to develop funding for projects across the net zero agenda, with funding from existing sources such as UK growth funding schemes.

For example, the UK shared prosperity fund provides £2.6 billion in funding for investment in places, including for community infrastructure projects. Ofgem supports community energy projects and welcomes applications to the industry voluntary redress scheme. Through our local net zero hubs, we are supporting local authorities and community energy groups to work together, including by funding a pilot programme that supports local authorities to develop community-led energy groups and projects.

The Government have also reintroduced the community energy contact group to strengthen our engagement with the sector. I have already outlined our arguments as to why the new clause would not be fair, so I am afraid that I cannot commit to writing to the Committee, as the hon. Member for Kilmarnock and Loudoun asks me to. In relation to why my own personal position may be now what it is, I have always been, and remain, committed to supporting community-led energy groups across the country. That is why we are working to implement schemes to support those projects across the entire UK. We will continue to do so, and I will be their biggest champion.

[Alan Brown]

It was positive to hear the Minister say, “Watch this space” because the Government are reviewing things. However, I reiterate my request that he writes to the Committee to outline what he thinks the costs will be. That must be a Government concern if they are considering how to provide further support to community energy schemes. That is a serious request—I am not trying to be awkward. Also, how much community energy is being deployed each year?

[Andrew Bowie]

I would be delighted to engage in further discussion with the hon. Gentleman and other interested hon. Members. I will commit to ongoing engagement, but we do not believe that the new clause provides any added value.

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

The Minister said, “Watch this space”. It would be very helpful if he were to give us an outline of what the content of the space might actually look like.

[Andrew Bowie]

Far be it from me to spoil the enjoyment for hon. Members! I said this when we debated it last week, and I say it again: we continue to work on this. We continue to look at what more the Government can do to support community energy projects across the United Kingdom, and I will commit to provide an update on the next steps ahead of Report. I hope that is suitable for hon. Members. I do not believe that this new clause would add any value, so I encourage—indeed, I humbly beg—the hon. Member for Sheffield, Hallam to withdraw her new clause.

[Olivia Blake]

Beg the Minister might, but I will be pushing this new clause to a vote. The comments made by the SNP spokesperson, the hon. Member for Kilmarnock and Loudoun, and the Opposition spokesperson, my hon. Friend the Member for Southampton, Test, show why we are not completely confident that information from the Minister will be forthcoming, but I welcome his comments and his statement that he is currently looking at this and that there will be something ahead of Report. However, I truly feel that this new clause is the bare minimum requirement in this space, so we will push it to a vote.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Dr Whitehead]

I would agree if that were not my metaphorical way. Of course I do not believe that the former Secretary of State for Business, Energy and Industrial Strategy is going to take the Minister into a cupboard and do him over; it is a metaphor that I hoped might convey some of the possible lingering influence of the right hon. Member for North East Somerset on our present considerations. I am sure that the Minister will want to put that lingering influence out of his mind when considering what to do today.

After all the work that has been done on getting this clause back into the Bill, I confidently expect the Minister to greet it with acclamation. He does not have to do any work on it now, because it is ready to go. He can proceed with a Bill he can be proud of through its remaining stages in this House.

[Andrew Bowie]

For the record, let me make it absolutely clear that I have only the greatest respect for my right hon. Friend the Member for North East Somerset and that he has never expressed any desire to take me into a cupboard and, metaphorically or not, do me over. We enjoy a very good relationship. Although we disagree on some points of principle, we are broadly in agreement on the general direction of travel that is needed for the betterment of this country. I put on record my thanks for his service in supporting the Government in the various offices in which he served.

I also thank the hon. Member for Southampton, Test for tabling new clause 88. I note that it reflects the clauses that were in this Bill when it was first published in July last year, as he has pointed out. However, I am sure that it will not have escaped his notice that a great deal has happened to energy prices since then. Last September, the Government announced a massive package of support for consumers. As part of the work to deliver that package, the Domestic Gas and Electricity (Tariff Cap) Act 2018 was modified by the Energy Prices Act 2022, which received Royal Assent on 25 October.

Those modifications were made so that the tariff cap could function both as a cap to ensure that prices are efficient and as the reference price for the subsidy payments to households under the energy price guarantee. Although energy prices have now fallen below the level at which energy price guarantee payments are being made, it will remain in force until the end of March 2024 to protect households from price spikes. To ensure that the support rates under the energy price guarantee could be set and delivered effectively and quickly, the Energy Prices Act removed the requirement on Ofgem to carry out a review and to produce a report and recommendation to inform annual decisions by the Secretary of State on whether to extend the cap. As a result, there is now no automatic end date for the cap and the Secretary of State will give notice of when the tariff cap will end, but that does not change the fact that the tariff cap was always intended to be a temporary measure. It remains so, for now; as stated in the Government’s energy security plan, we intend to consult later this summer on the future of the price cap. In the light of my remarks, I hope that the hon. Member for Southampton, Test will feel that he can withdraw the new clause.

--- Later in debate ---

[Dr Whitehead]

I beg to move, That the clause be read a Second time.

The Committee will be delighted to know that I do not intend to detain it for any length of time on the new clause, which follows on from our earlier debate about the setting up of the independent system operator.

We think something is missing from the otherwise pretty comprehensive and good arrangement for the setting up, organisation and running of the independent system operator, which we completely support; although we would like to see the independent system operator playing more of a system architect role than is presently envisaged, in general we are absolutely for setting up the ISOP in the way that has been described. What ought to follow is at least a consideration of whether the arrangements between the ISOP and the distributed network operators, on which we tabled some amendments at the time, are sufficiently robust to enable a system operator function to operate at all levels of grid delivery. As I said a little while ago, there are decreasing distinctions between the lower-level grid operated by the DNOs and the high-level grid, which is the function of the National Grid ESO at the moment.

The possibility arises that it will be possible—more than possible—to establish regional independent system operators to perform, in conjunction with the ISOP, the same sort of function that is presently envisaged for the ISOP itself. That would be a slightly different function, inasmuch as the regional system operators could be responsible for what is increasingly likely to happen with regional balancing, ancillary services and other such things that are part of the emerging structure of the grid as a whole, as we move from a centralised to a much more decentralised grid arrangement.

RISOs, as I call them, would be able to play a substantial role in that. All new clause 88 suggests is that the Secretary of State produce a report on the advisability of establishing regional independent system operators. I called them RISOs a moment ago, but RISOs are actually duplicating machines favoured by those with left-wing tendencies producing leaflets; these would be RISOPs, which could be established to provide that important link arrangement between the high-level grid and the low-level grid for the future.

That is all, really, as far as the new clause is concerned. It does not require anything earth-moving to take place in the immediate future—just consideration of this arrangement. It may well be that just by raising the matter I will have put the thought in the Secretary of State’s mind that maybe we should consider going in that direction; it is certainly a direction the Opposition would consider going in if our roles on these Benches were reversed. My purpose in tabling new clause 89 was to raise the issue and see what the Minister has to say about it; I certainly do not intend to press it to a vote.

[Andrew Bowie]

For the record, may I point out that it is not just leaflet publishers of left-wing tendencies who are au fait with risograph printers? I have spent many hours standing by a RISO producing leaflets for those of centre-right tendencies.

I may be wrong but, according to my notes, this is the last new clause or amendment the hon. Member for Southampton, Test will speak to, so I thank him and the shadow team for the very collegiate way in which they have proceeded through Committee stage. I look forward to engaging with the hon. Gentleman again on Report and Third Reading, and indeed in the interim, when I am sure we will be corresponding. I thank all hon. Members for their contributions thus far.

New clause 89 speaks to the creation of a new set of bodies to deliver regional system operation and planning, and in many ways repeats the intentions of amendment 97, which the hon. Member for Southampton, Test tabled. As with that amendment, the new clause creates powers relating to the operation of distribution systems.

Ofgem has recently consulted on the future of local energy institutions and governance, with a focus on the creation of regional system planners specifically. That consultation closed on 10 May, and I suggest that this new clause prejudges the outcome of that work.

Alongside Ofgem, the Government will carefully consider the proposals we are consulting on. If we then proposed legislative or licence changes that affected the relationship between the ISOP and distribution networks, any additional functions accruing to the ISOP would be covered by the wording in clause 119(2)(b) and clause 134(3)(a). That is because those clauses allow for other functions to be conferred on the ISOP under, or by virtue of, legislation other than part 4.

I hope that puts the mind of the hon. Member for Southampton, Test at ease and that he feels able to withdraw his new clause.

[Dr Whitehead]

I have no further comments to make, other than to thank the Minister for his comments. There are indeed consultations under way through Ofgem, and I look forward to seeing what those have to say. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 90

Objections by planning authorities to applications for consent under section 36 or 37 of the Electricity Act 1989

“(1) Schedule 8 to the Electricity Act 1989 is amended as follows.

(2) Omit paragraph 2.

(3) In the cross-heading before paragraph 3, omit ‘by other persons’.

(4) In paragraph 3, omit sub-sub-paragraph (2)(a).”—(Alan Brown.)

This new clause would remove the ability of a local planning authority automatically to cause a public inquiry to be held by objecting to an application to the Secretary of State for consent under section 36 or 37 of the Electricity Act 1989, instead leaving Ministers to decide whether a public inquiry should be held.

Brought up, and read the First time.

--- Later in debate ---

The Minister spoke about working collegiately with the shadow Minister, the hon. Member for Southampton, Test, and I hope I have been collegiate. I appreciate the ongoing discussions with the Scottish Government, because in this case it is about working together to achieve the best end.

[Andrew Bowie]

I thank the hon. Gentleman for his contributions on the new clauses. I have said in Committee, on the Floor of the House and elsewhere that this is the biggest challenge we face—connectivity and improving capacity in the grid—if we are to reach our targets, not just on our net zero commitments but in becoming more energy secure and delivering cheaper bills for the British people.

I recognise that the speed of electricity consenting in Scotland is critical to those aims and to the whole UK economy, as I have just suggested. It is important to enable rapid deployment of renewable energy generation and of the transmission lines needed to transport it to consumers across the country. With that goal in mind, we are aware that areas of the Scottish planning system need to be reviewed—specifically the ones that the hon. Member for Kilmarnock and Loudoun just mentioned—and we are committed to speeding up planning decisions across the UK wherever possible.

I am sure, however, that we are all in agreement—I know the hon. Gentleman is—that the issues are incredibly complex and multifaceted, and that any potential changes need to be carefully considered to ensure they are the right ones for consumers and the network. For example, as the Electricity Act 1989 applies to projects in England and Wales less than 132 kV and 2 km, and to all transmission projects in Scotland, we need to be certain that any amendments to the Bill would not have unintended consequences elsewhere. Moreover, we would not want to remove an automatic inquiry trigger without understanding what could replace that process.

The Government share the concerns of the hon. Member for Kilmarnock and Loudoun and we want to find a solution. I have had constructive discussion with the Energy Minister in the Scottish Government and within my Department on how to resolve this issue moving forward, but I am interested to meet the hon. Gentleman and anyone else he might suggest so that we can work together on a solution to this complicated issue. I therefore do not feel that we can accept his new clauses, and I would be grateful if he did not press them to a vote.

[Alan Brown]

I was shocked when the Minister said that he could not accept the new clauses—I did not see that coming! I am having to think on my feet, because I am completely thrown.

To make a serious point, I appreciate the Minister’s offer of a meeting, and I would like to take that up. I suggest that we have someone from the industry there as well. I am happy to work with the Minister to see how we can resolve the matter. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Schedule 1

Permitted disclosures of material obtained by OGA

“Disclosure by OGA to specified persons

1 (1) Section (Prohibition on disclosure) does not prohibit a disclosure of protected material by the OGA which—

(a) is made to a person mentioned in column 1 of the table below,

(b) is made for the purpose of facilitating the carrying out of that person’s functions, and

(c) is a disclosure of protected material obtained by the OGA under a provision mentioned in the corresponding entry of column 2 of the table.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 114, in clause 275, page 242, line 31, at end insert—

“(10A) The Secretary of State may not make regulations under this Act which would affect any matter within the competence of the Scottish Parliament unless the Secretary of State has first—

(a) consulted the Scottish Ministers on a draft of the regulations; and

(b) obtained the consent of the Scottish Parliament to the regulations.”

Clauses 275 to 277 stand part.

Government amendments 171, 172, 123, 133, 131 and 175.

Clause 278 stand part.

Government amendment 17.

Clause 279 stand part.

[Andrew Bowie]

I have just a 3,000-word speech—[Laughter.]

Government amendment 171 is consequential on the previously debated new clauses associated with providing powers to the Secretary of State to design and allocate a RAB as part of the hydrogen transport business model. It sets out that these new clauses come into force two months after Royal Assent.

Government amendment 172 is consequential on the previously debated Government new clause 72, associated with providing powers to the Secretary of State to modify the Gas Act 1986 in relation to hydrogen. It sets out that Government new clause 72 comes into force two months after Royal Assent.

Government amendments 123 and 133 are consequential and necessary to ensure that the previously debated Government new cause 52, on the Ofgem net zero duty, and new clauses 53 and 54, on energy-intensive industries, come into force two months after Royal Assent.

Government amendment 131, alongside Government new clause 55, which we have already discussed, will provide the Secretary of State with the power to make changes to the Nuclear Installations Act 1965 regarding the convention on supplementary compensation for nuclear damage and other relevant legislation, if required in the future. That would be by means of an order made through the affirmative procedure. This power will come into force two months after Royal Assent.

Government amendment 175 means that the new clauses relating to Great British Nuclear come into force two months after Royal Assent. Government amendment 17 removes the privilege amendment added to the Bill by the Lords. That is standard procedure.

Clauses 274 to 279 are general tidying-up provisions at the end of the Bill. Clause 274 provides the Secretary of State with a regulation-making power to make consequential amendments that arise from the Bill.

Clause 275 provides that regulations made under the Bill are to be made by statutory instrument. Clause 276 provides information on how terms that are used throughout the Bill should be interpreted in the Bill. Separate interpretation provisions are found in other parts of the Bill where those terms appear only in those parts.

Clause 277 sets out the territorial extent of provisions in the Bill. Clause 278 sets out when the provisions in the Bill come into force. Finally, clause 279 confirms the short title by which the Bill may be cited.

--- Later in debate ---

[Andrew Bowie]

I thank the hon. Member for Kilmarnock and Loudoun for amendment 114. I highlight the fact that the UK Government have worked closely and constructively with the devolved Governments during the preparation and passage of the Bill. As I have said already, I recently met the Scottish Minister for Energy and the Environment, Gillian Martin, to discuss the topic of this amendment. As I mentioned, the negotiations on the legislative consent motion are still ongoing, and I would not want to prejudge any of those discussions.

The Bill has been carefully designed to respect the devolution settlements. We have already included consultation requirements with the devolved Governments in areas where the Bill provides powers to make regulations in devolved areas, and we have offered to enhance them. Those requirements provide Scottish Ministers with appropriate opportunities to contribute to the development of regulations. Indeed, British Government officials regularly engage with their Scottish Government counterparts and share information on any upcoming UK Government secondary legislation that legislates on devolved matters in Scotland. We will, of course, continue to do so.

Amendment 114 would require consent from the Scottish Parliament for each regulation. I and the Government believe that imposing a blanket consent procedure and a lengthy process on future secondary legislation is unnecessary, creates additional administrative burdens and risks the making of future legislation. I hope that, with those comments, the hon. Gentleman will find it within himself to withdraw his amendment.

[Alan Brown]

I do not think it would be an unnecessary legislative burden, to be honest. If it is some simple process, consent will be equally simple to achieve, so I do not think it would unduly delay things or overcomplicate them. I will not press amendment 114, but I reserve the right to table it on Report, because I really want to ensure that things are resolved to the satisfaction of each side.

Question put and agreed to.

Clause 274 accordingly ordered to stand part of the Bill.

Clause 275

Regulations

Amendment made: 19, in clause 275, page 241, line 35, after “State” insert “, the Treasury”.—(Andrew Bowie.)

This amendment provides for regulations made by the Treasury to be made by statutory instrument. This will affect regulations under paragraph 9 of Schedule 7.

Clause 275, as amended, ordered to stand part of the Bill.

Clauses 276 ordered to stand part of the Bill.

Clause 277

Extent

Amendments made: 168, in clause 277, page 243, line 6, at end insert

“, except section (Power to modify Gas Act 1986 in relation to hydrogen)”.

This amendment is consequential on Amendment 170.

Amendment 169, in clause 277, page 243, line 16, at end insert—

“(aa) sections (Key definitions for Part), (Designation), (Designation: procedure), (Revocation of designation), (Grant, extension or restriction of gas transporter licence by Secretary of State), (Applications for grant etc of gas transporter licence), (Modification of gas transporter licence by Secretary of State), (Scope of modification powers under section (Modification of gas transporter licence by Secretary of State)), (Procedure etc relating to modifications under section (Modification of gas transporter licence by Secretary of State)), (Information and advice), (Conditions of gas transporter licences for conveyance of hydrogen), (Secretary of State directions to the GEMA) and (Repeal of Part);”.

This amendment provides for the new clauses that are intended to form a new Part inserted after Part 2 to extend to England and Wales and Scotland.

Amendment 170, in clause 277, page 243, line 17, at end insert—

“(ba) section (Power to modify Gas Act 1986 in relation to hydrogen);”.

This amendment provides for NC72 to extend to England and Wales and Scotland.

Amendment 174, in clause 277, page 243, line 22, at end insert—

“(h) sections (Great British Nuclear), (Crown status), (Great British Nuclear’s objects), (Financial assistance), (Secretary of State directions and guidance), (Annual report), (Annual accounts), (Transfer schemes), (Transfer schemes: compensation), (Transfer schemes: taxation), (Transfer schemes: provision of information or assistance), (Reimbursement and compensation in connection with designation) and (Pension arrangements in connection with Great British Nuclear);”.—(Andrew Bowie.)

This amendment means that the new clauses relating to Great British Nuclear extend to England and Wales and Scotland.

Clause 277, as amended, ordered to stand part of the Bill.

Clause 278

Commencement

Amendments made: 171, in clause 278, page 244, line 7, at end insert—

“(ba) sections (Key definitions for Part), (Designation), (Designation: procedure), (Revocation of designation), (Grant, extension or restriction of gas transporter licence by Secretary of State), (Applications for grant etc of gas transporter licence), (Modification of gas transporter licence by Secretary of State), (Scope of modification powers under section (Modification of gas transporter licence by Secretary of State)), (Procedure etc relating to modifications under section (Modification of gas transporter licence by Secretary of State)), (Information and advice), (Conditions of gas transporter licences for conveyance of hydrogen), (Secretary of State directions to the GEMA) and (Repeal of Part);”.

This amendment provides for the new clauses that are intended to form a new Part, to be inserted after Part 2, to come into force two months after Royal Assent.

Amendment 172, in clause 278, page 244, line 9, at end insert—

“(ea) section (Power to modify Gas Act 1986 in relation to hydrogen);”.

This amendment provides for NC72 to come into force two months after Royal Assent.

Amendment 123, in clause 278, page 244, line 10, at end insert—

“(ea) section (Principal objectives of Secretary of State and GEMA);”.

This amendment provides for NC52 to come into force two months after Royal Assent.

Amendment 133, in clause 278, page 244, line 12, at end insert—

“(ga) sections (Electricity support payments for energy-intensive industries) and (Levy to fund electricity support payments);”.

This amendment provides for NC53 and NC54 to come into force two months after Royal Assent.

Amendment 131, in clause 278, page 244, line 16, at end insert—

“(l) section (Convention on Supplementary Compensation for Nuclear Damage: implementation power).”.

This amendment provides for NC55 to come into force 2 months after Royal Assent.

Amendment 175, in clause 278, page 244, line 16, at end insert—

“(l) sections (Great British Nuclear), (Crown status), (Great British Nuclear’s objects), (Financial assistance), (Secretary of State directions and guidance), (Annual report), (Annual accounts), (Transfer schemes), (Transfer schemes: compensation), (Transfer schemes: taxation), (Transfer schemes: provision of information or assistance), (Reimbursement and compensation in connection with designation) and (Pension arrangements in connection with Great British Nuclear);”.—(Andrew Bowie.)

This amendment means that the new clauses relating to Great British Nuclear come into force 2 months after Royal Assent.

Clause 278, as amended, ordered to stand part of the Bill.

Clause 279

Short title

Amendment made: 17, in clause 279, page 244, line 29, leave out subsection (2).—(Andrew Bowie.)

This amendment removes the privilege amendment inserted by the Lords.

Clause 279, as amended, ordered to stand part of the Bill.

Title

[Andrew Bowie]

I beg to move amendment 11, in title, line 3, leave out “industrial”.

This amendment is consequential on Amendment 10.

[The Chair]

With this it will be convenient to discuss Government amendments 173 and 134.

[Andrew Bowie]

The amendments simply make changes to the Bill’s long title to reflect amendments made in Committee. The amendments reflect the introduction of measures on greenhouse gas removals, hydrogen transport and storage, and energy-intensive industries, and ensure that they are reflected in the Bill’s long title.

Amendment 11 agreed to.

Amendments made: 173, in title, line 4, after “production” insert “and transportation”.

This amendment makes a change to the long title to reflect NC59, NC60, NC61, NC62, NC63, NC64, NC65, NC66, NC67, NC68, NC70 and NC71 (which are intended to form a new Part to be inserted after Part 2).

Amendment 134, in title, line 7, after “codes;” insert—

“about financial support for persons carrying on energy-intensive activities;”.—(Andrew Bowie.)

This amendment is consequential on NC53 and NC54. It reflects those new clauses in the Bill’s long title.

Question proposed, That the Chair do report the Bill, as amended, to the House.

[Andrew Bowie]

Thank you, Mr Sharma, for your excellent chairing of the Committee this morning, and thank you to Mr Gray, Dr Huq and Ms Nokes for their equally excellent chairmanship over the course of the Committee.

I pay special tribute to the Clerks and to my officials for their tireless work on what is quite a hefty piece of legislation. I also thank Members on both sides of the Committee for the constructive, thoughtful and insightful debate on this landmark Bill. I have already thanked the shadow Minister, the hon. Member for Southampton, Test, for his overall support, and for our way of working in Committee, which has been collegiate and good mannered—well, not good mannered. [Interruption.] Bad mannered! [Laughter.] Although we have not agreed on every detail, I thank him for his knowledgeable contributions.

The Energy Bill will provide a clear, more affordable and more secure energy system. It will liberate private investment, including in technologies, reform our energy system so that it is fit for purpose, and ensure its safety, security and resilience. I look forward to working with everyone present to take the Bill through Report stage and on to Royal Assent.

[Dr Whitehead]

I associate myself with the Minister’s remarks concerning your excellent chairing, Mr Sharma, and that of your colleagues the hon. Member for North Wiltshire (James Gray), my hon. Friend the Member for Ealing Central and Acton (Dr Huq) and my constituency neighbour the right hon. Member for Romsey and Southampton North (Caroline Nokes). I hope that you can convey to them the thanks of all Committee members for their excellent work in bringing the Committee to its conclusion.

I also thank, beyond the normal level of thanks, the Committee Clerks, who have been of tremendous assistance to me in bringing forward the sinews for debate by way of the amendments and new clauses, all in perfect order and debated accordingly. In my relatively long experience of taking Bills through the House, their work has been way beyond the call of duty, for which I am very grateful to them.

I believe the Minister is the record holder of fastest House of Commons runner in the London marathon ever.

[Andrew Bowie]

No—just in one year, I am afraid.

[Dr Whitehead]

I think it was ever, but perhaps we should have a rerun. It is rather appropriate that we have got through this marathon Bill in good order and in good time. The Minister is very substantially responsible, not least with his speed-reading skills, for managing us through that lengthy process, and I thank him for that. I also thank him for his good humour, collegiality and careful consideration of the points that we have put forward.

We of course do not agree with everything that has come out of the Committee, and we will pursue some of those things during the Bill’s later stages, but I hope that I can say on behalf of the whole Committee that, overall, we have between us delivered a Bill that fundamentally we pretty much agree on through to its next stages in relatively good order. That is not always the case in this place, and it is something we can all be quite proud of. That is the end of my thanks. I hope that everyone will be happy with having the afternoon off, now that we can move forward to Report stage.

Great British Nuclear

Andrew Bowie Excerpts

Wednesday 28th June 2023 Westminster Hall

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

It is an absolute pleasure to serve under your chairmanship, Sir George, and—my goodness me—to discuss nuclear with my hon. Friend the Member for Ynys Môn (Virginia Crosbie). The passion that she brings to this debate is unmatched. The term “champion” is bandied about a lot in this building, but she genuinely is one of the greatest champions for nuclear. Indeed, ever since she arrived here in late 2019, she has been an incredible champion in Parliament for her constituency and its interests.

My hon. Friend has an impressive track record of championing her constituency, as I have said, to remain at the heart of decisions on the future of nuclear power, the investment that it could bring and the jobs that it could create, both locally and across the United Kingdom. I will continue to encourage Government and Great British Nuclear to engage with communities such as hers that are considering whether their land might be suitable for the deployment of nuclear facilities in the near future.

The invasion of Ukraine and the subsequent rise in global energy prices have demonstrated the paramount importance of accelerating home-grown power and strengthening our national energy security. The hon. Member for Strangford (Jim Shannon) put that better than I ever could in his intervention. That is in addition to the significant contribution that nuclear could make to achieving our net zero objectives.

As part of our response, the Government have committed to ensuring that the UK is one of the best places in the world to invest in civil nuclear power, and are taking the necessary steps to revitalise the UK’s nuclear industry. Last year alone, the Government made an historic investment of £700 million and became a shareholder in the Sizewell C project, in support of our long-standing objective to take a large-scale nuclear project to the point of final investment decision in this Parliament, subject to all relevant approvals.

[Dr Poulter]

The Minister will also be aware that the Secretary of State overruled some of the concerns with the development control process that supported Sizewell C going ahead. Although most of us accept the importance of investment in projects such as Sizewell C, one of the main concerns was about the failure of EDF to engage with legitimate concerns across Suffolk and its communities about the construction process and the eventual building of Sizewell C. What reassurance can the Minister give to residents that lessons will be learned from that?

[Andrew Bowie]

Perhaps it will reassure my hon. Friend to know that I made it a priority to visit the Sizewell C site, not just to see the site and meet EDF and the Sizewell C company, but to hear from and engage with local communities, including those with concerns about the project, how the consultation exercise was run and the engagement with the companies involved. I look forward to continuing my engagement with those individuals and communities that are concerned about the project and the vast number of critical national infrastructure projects that will be built in and around the hon. Gentleman’s constituency. Those are critical pieces of national infrastructure, but in delivering this new investment into our grid and this incredible investment in Sizewell C, it is vital that we take communities with us and that they feel that they have had a say in the process of getting to the final decision on whether to proceed. I give my commitment, here today, that I will continue to meet the groups concerned and will do so right up to the point that there are spades in the ground at Sizewell. Indeed, whoever my successor is will do the same.

The British energy security strategy set out our ambition for deploying up to 24 GW of nuclear power by 2050, which would be 25% of our projected 2050 electricity demand. That includes two nuclear projects taking final investment decisions in the next Parliament. We also announced the creation of Great British Nuclear, which will be an arm’s length body responsible for driving delivery of new nuclear projects, backed with the funding that it needs.

GBN will be at the heart of a programmatic approach that will give industry and investors the confidence necessary to deliver projects at pace, reducing costs through learning and replication. Earlier this year, the “Powering up Britain” set out our plans for GBN to launch a competitive selection process for choosing the best small modular reactor technologies in the UK.

In April, GBN launched the first stage of this process in the form of a market engagement exercise. The second phase, the down selection process, will be launched over the summer, with an ambition to assess and decide on the leading technologies by autumn. The Government will provide co-funding to be deployed by GBN to support the development of those technologies and will work with successful bidders on ensuring that the right financing and site arrangements are in place, in line with the commitment to progress projects in the next Parliament. The total level of development funding will be subject to future spending reviews. I hear the suggestions from my hon. Friend the Member for Ynys Môn and will take them back to the GBN board.

GBN will work with the Government on access to potential sites for new nuclear projects to achieve our long-term ambition. This reflects our collective awareness of the growing local and regional interest in a number of sites for further nuclear development. We intend to publish consultation in 2023 as a first step towards the development of the new national policy statement for nuclear, to ensure our approach remains resilient to the needs of achieving net zero.

I assure my hon. Friend that community engagement will be central to the development of projects at each site. Developers will need to work with the host authorities and communities, statutory bodies and other key stakeholders to shape the proposals that will ultimately inform statutory consultation requirements and an application for a development consent order. Further engagement will also be undertaken as part of the wider regulatory processes to be completed prior to the construction and operation of a new power station.

The Government recognise the strong interest in and support for nuclear power across north Wales. The Government are also aware of the potential of the Wylfa site, which is included in the national policy statement for new nuclear power. Looking ahead, both Great British Nuclear and the national policy statement team would welcome any conversations with stakeholders who are considering whether their land might be suitable for the deployment of nuclear facilities in the future. GBN will, of course, support the Government’s consideration of further large gigawatt-scale projects to help us deliver on our net zero ambitions.

Our commitment to a nuclear programme and GBN will put the UK on a path to achieving its ambition and becoming a global leader in civil nuclear power and SMRs, which could include the creation of high-value jobs and the development of our capabilities. I would like to close by thanking my hon. Friend the Member for Ynys Môn for securing this important debate. I look forward to visiting Ynys Môn and continuing to engage with her and other stakeholders in the future.

Question put and agreed to.

Energy Bill [ Lords ] (Sixteenth sitting)

Andrew Bowie Excerpts

Committee stage
Tuesday 27th June 2023 Public Bill Committees

[Alan Brown]

It is a pleasure to serve under your chairmanship, Ms Nokes.

We are now in the final week of this Bill Committee, and Members will have spotted that a lot of Government new clauses and amendments have been tabled and accepted. In the spirt of fairness, the Government should also accept some of our new clauses and amendments; hopefully that is what is going to happen. Rather than getting into a debate, if the Minister wants to intervene and tell me which new clauses the Government will accept in the spirit of fairness, I would be happy to give way.

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

I would not like to put you off.

[Alan Brown]

Okay, so we go back to my monologue justifying why the Government should accept some of our new clauses, including new clauses 1 and 2.

Clearly, we should be grateful that energy prices are starting to fall, but the reality is that the cap on energy bills for an average household was set at £1,138 in April 2021. This month, Ofgem has set the cap at more than £2,000, so energy bills are still nearly double what they were two years ago. The reality is that many people are struggling badly with their energy bills, even though prices are falling, and those struggling the most are those with prepayment meters. People with prepayment meters can access credit of only £5 or £10. If they reach that credit limit, the lights go out—it is as simple as that. They cannot turn on the gas or electricity, and it is a real difficulty for people. It also means that if people cannot get out of the house for whatever reason—if they are ill or have just had a newborn kid—and have reached the threshold, they lose access to their energy by virtue of not being able to top up their meters.

It is unfair that people with prepayment meters pay higher standing charges. Frankly, it is an outrage that people who pay in advance for their energy are paying a premium to access it, whereas people like us in this room, who pay by direct debit, have access to credit and cheaper tariffs. As I say, the reality is that if someone is on a prepayment meter, they are going to struggle to pay their bills, they will pay more and they will face the difficulties associated with a lack of credit.

As End Fuel Poverty states:

“Imposition of a pre-payment meter is disconnection by the back door. When you can’t top up the meter everything clicks off”.

Forcing people to have prepayment meters means that those who are already struggling are put on to a system whereby they will be forced to ration, automatically disconnected when the credit limit is reached and more likely—this is the rub—to have a cold, damp home, with the long-term health implications that that brings, as well as the short-term heating and eating dilemmas.

It is estimated that 19% of housing stock across the UK is damp. The proportion rises to nearly a third, or 31%, for those on prepayment meters. In other words, if someone is on a prepayment meter, they are 65% more likely than the average person to live in a damp house. Some 51% of prepayment customers have health conditions or disabilities, so in many ways the existing system is punishing those who are more likely to require more energy in the first place. That, in a nutshell, is why a social tariff is needed for those with prepayment meters.

Research by Utilita indicated previously that as many as 14% of the 4.5 million households with prepayment meters did not choose to be on such tariffs, and what has been happening during the cost of living crisis is outrageous. For example, an investigation for the i paper revealed that since the end of lockdown energy firms have secured almost 500,000 court warrants to forcibly install meters in the homes of customers who are in debt. Freedom of information requests showed that in the first six months of last year there were 180,000 applications for such warrants.

We then had the bombshell coverage of an undercover reporter working for bailiffs, which exposed the cruelty of some bailiffs for what it was: revelling in the forced installation of prepayment meters, no matter the vulnerabilities of the customers. The officers of that debt company were working on behalf of British Gas, which of course said that it was shocked and that it did not advocate such a policy.

The rub is that some utility companies are using debt collection agencies routinely as part of their process to collect money that they believe they are owed. That set-up relieves utility companies of the burden of debt collection. More importantly, it stops them providing debt advocacy and interacting with customers, which is what is required. Meanwhile, the debt collection companies add their own fees just for reissuing bills to customers.

All that is why we tabled new clauses 1 and 2. Voluntary codes for prepayment meters will never be enough. It is quite clear that we will never know how many people were forced on to prepayment meters against their will, especially when smart meters can be switched remotely to prepayment mode without people even realising initially.

New clause 1 sets out the need for legacy prepayment meters to be switched to smart meters as long as consent is given. This is an enabling aspect, as smart meters will make it easier to implement the provisions of new clause 1(3), which will end the practice of so-called self-disconnection. The provisions include the consideration of a social tariff, and, most importantly, mechanisms to allow customers to access credit and not be cut off immediately as they would be with a £5 or £10 credit limit.

New clause 2 restricts the forcible use of prepayment meters. It does not prevent informed consent and agreement for people to move to prepayment mode, because some customers like it as a way of managing their debt, but what is important is consent and an understanding of what prepayment means. The provisions also give access to impartial debt counselling services before the switch to prepayment mode is needed. Subsection (2)(c) places a duty on the Secretary of State to assess and define customer vulnerabilities, because the current definition is too narrow and does not cover some people who should be classed as vulnerable. Lastly, subsection (3) confirms that switching smart meters to prepayment mode is considered the same as a legacy prepayment meter.

Too many people have been forced on to prepayment meters. We cannot allow that to continue and we cannot allow the door to reopen for energy companies. No matter what they say here and now when there is an immediate storm and a backlash, we need to protect people for good going forward, which is what new clauses 1 and 2 will do.

According to recent Government figures, £120 million-worth of the vouchers issued for customers in prepayment mode were still unclaimed at the start of June. There are only four days left until the deadline on 30 June, so I hope the Minister will update us on the outstanding balance of unclaimed prepayment meter credit vouchers. Having nearly 20% of vouchers unclaimed at the start of the month is indicative of a failed policy that does not support the most vulnerable in our society. Again, that is why we need new clauses 1 and 2 to protect those who sometimes cannot protect themselves.

[Kerry McCarthy (Bristol East) (Lab)]

As always, it is a pleasure to see you in the Chair, Ms Nokes.

I rise primarily to speak in support of new clause 38, but it has quite a lot of overlap with new clause 2. Our new clause 38, on the restriction of the use of prepayment meters, says:

“The Secretary of State may by regulations restrict the installation of new prepayment meters for domestic energy use.”

It makes provision to ensure that consumers have full and informed consent on the installation of a prepayment meter, and that vulnerable customers are not put on to prepayment meters. We heard from the hon. Member for Kilmarnock and Loudoun some of the reasons why we have shared concerns about that. Some of my points will be very familiar to the Minister if he followed the debate earlier this year, when it reached crisis point.

Citizens Advice estimates that the number of people moved on to prepayment meters reached 600,000 in 2022, up from 380,000 in 2021. We know that that comes at a cost to them. There is a poverty premium on some of the most vulnerable, and on people on the lowest incomes, because of the shift to prepayment meters, and their use should be restricted as a result. Those with prepayment meters are more likely to be in fuel poverty and facing significant debts already. We find ourselves in a situation in which those requiring the most support are being forced to pay the most and are given the least help.

Citizens Advice revealed at the start of the year, at the height of the energy crisis, that someone was being cut off from their energy supply every 10 seconds, with millions unable to afford to top up their prepayment meters. We also know that so-called voluntary self-disconnection was a thing. People simply could not afford it, so they would not necessarily feature in the numbers. Labour’s call for a moratorium on the forced installation of prepayment meters was dismissed until the March Budget. The Secretary of State told the House on a number of occasions that he was talking to Ofgem and that plans were in motion, but during that period we were still hearing horrific stories about forced entry to people’s houses, warrants being issued and energy companies continuing to go down that path.

Our view was very much that it was the Government and the energy regulator’s responsibility to ensure that people were not left at home in the cold and the dark, yet we had to press incredibly hard before anything was achieved. Over the winter, more than 130,000 households that included a disabled person or someone with a long-term health condition were being disconnected from their energy supply at least once a week because they could not afford to top up. The same report also said that

“63% of PPM users who had disconnected in the last year said it had a negative impact on their mental health. This rises to 79% of disabled and people with long-term health conditions.”

Really good work was done by organisations such as Citizens Advice, but it also took tireless investigations from UK newspapers to expose the scale of the crisis. An investigation by the i in December showed that magistrates were batch processing hundreds of warrants in the space of a few minutes to allow the forced installation of prepayment meters, with one court in the north of England approving 496 warrants in just three minutes. At some point, we were given reassurances that people’s circumstances and vulnerabilities were being taken into account before the warrants were issued, but if nearly 500 are issued in three minutes, clearly they are not taking any information into account; it is very much a rubber-stamping exercise.

An undercover report by The Times in February highlighted how British Gas was employing debt collectors to break into people’s homes. Among them were customers described in the staff notes as a woman in her 50s with “severe mental health bipolar”, a woman who

“suffers with mobility problems and is partially sighted”,

and a mother whose

“daughter is disabled and has a hoist and electric wheelchair”.

We heard in debates at the time that many MPs had their own stories of constituents who were affected by the forced installation of prepayment meters; hopefully we will hear from some today to back up what we are calling for.

It was therefore a relief when action was taken in April, and a code of practice was introduced by Ofgem, but we have to wonder why the scheme is voluntary rather than compulsory. Just yesterday, the Committee on Fuel Poverty, in its annual report, expressed disappointment with Ofgem’s code of practice, stating that it is

“disappointingly limited in ambition”.

We have to wonder what the Government’s role is in that. I argue that Ofgem has proven incapable of dealing with the situation and it is up to the Government to step up and take control. That is what we seek to achieve with the new clauses.

The code’s voluntary nature still leaves too much power and judgment in the hands of energy suppliers, and the vulnerable and the voiceless should not be exposed to the dangers that prepayment meters pose, so I call on the Minister to give us some assurance that he accepts that it is the Government’s responsibility to act in this case—we cannot continue to leave it to voluntary codes of practice—and to support new clause 38.

[Andrew Bowie]

It is an absolute pleasure to serve under your chairmanship again, Ms Noakes, for sitting 16 in the final week before we conclude our proceedings in Committee. I thank Members for tabling their new clauses.

New clause 1 places a duty on the Secretary of State to ensure that all legacy prepayment meters are replaced with smart meters before the end of 2025. The Government have been clear that our aim is for as many households as possible to benefit from smart metering, including those that prepay for energy, which is why we have set minimum installation targets for suppliers until the end of 2025. To ensure effective scrutiny and transparency, large suppliers are also required to publish their performance against their targets, broken down by credit and prepayment mode. That ensures that they have strong incentives to deliver.

Although we agree with the hon. Member for Kilmarnock and Loudoun that smart prepayment is highly superior to legacy prepayment meters, it is also true that those customers who would benefit the most from prepayment meters can be among the hardest audiences to reach and the most vulnerable in our society. It is therefore critical that we tread carefully and do not place unrealistic targets in statute that may cause unintended consequences.

As drafted, the new clause could result in the prioritisation of the replacement of traditional prepayment meters. That may inadvertently deprioritise smart meter installation for credit consumers, many of whom are in vulnerable circumstances. Data from Ofgem indicates that around 70% of those with disabilities pay by direct debit and may therefore benefit from the automated readings that smart meters deliver.

Let me turn to the requirement to end self-disconnections within six months of the Bill becoming law. It is critical that the market delivers a fair deal for consumers, with an energy market that is resilient and investable over the long term. Ofgem’s recently published code of practice on prepayment is clear that when self-disconnection occurs, suppliers must make multiple attempts to contact the customer to understand the reasons for self-disconnection and offer appropriate support, including additional support credit. If frequent or prolonged periods of self-disconnection are identified, energy suppliers should assess whether a prepayment meter remains a safe and practicable option for that consumer.

As announced in the 2022 autumn statement, His Majesty’s Government have committed to work with consumer groups and industry to consider the best approach to consumer protection from April 2024, as part of a wider retail market reform. In addition, as announced at the spring Budget, we are keeping the energy price guarantee at £2,500 for an additional three months from April to June. That means we have covered nearly half a typical household’s energy bill through the energy price guarantee and energy bill support schemes since October, with a typical family saving £1,500. That is in addition to the expanded warm home discount scheme, which has been extended until 2026 and provides £475 million in support per year in 2020 prices.

New clauses 2 and 38 would allow the Secretary of State to restrict the use of prepayment meters, especially in relation to vulnerable consumers or where consumers are not aware that they are being moved to a prepayment mode. It is of course critical that our most vulnerable energy users are protected. The findings in The Times regarding British Gas customers were shocking and completely unacceptable. The Government acted quickly to tackle that issue of inappropriate prepayment meter use, and the Secretary of State wrote to energy suppliers insisting that they revise their practices and improve their action to support vulnerable households.

Following that intervention, all domestic energy suppliers agreed to pause the forced installation of prepayment meters and the remote switching of smart meters to prepayment mode. Ofgem rules are clear that suppliers can install a prepayment meter to recover a debt only as a last resort. They also require energy suppliers to offer a prepayment service only when it is safe to do so, with clear obligations on energy suppliers regarding support for customers in payment difficulty. The Secretary of State has called for more robust Ofgem enforcement on those issues, and Ofgem has responded by announcing a further review of supplier practices relating to prepayment meter customers.

[Kerry McCarthy]

The Minister may be about to come to this point, but I am wondering how it is going—does he know how many warrants are now being issued by the courts? Is he aware of statistics on how many prepayment meters are now being installed or on the type of customers who are being put on them?

[Andrew Bowie]

I do not have the exact numbers at my fingertips, but I am happy to write to the hon. Lady with that information. I can tell her that the senior presiding judge has ordered magistrates courts to immediately stop authorising warrants for energy firms to forcibly install prepayment meters while the process by which suppliers bring forward such applications is being reviewed.

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

In his reply to my hon. Friend the Member for Bristol East, will the Minister expand briefly on his understanding of the meaning of the word “pause” in relation to the forcible installation of prepayment meters by energy companies? As far as I am aware, there is no time set for that, nor is it subject to any other actions that the Government may take. Is it the Minister’s understanding that the pause is strictly time-limited and that practices may start again at the end of it?

[Andrew Bowie]

The pause will be until Ofgem has finalised the review of supplier practice in relation to prepayment meter customers. That is what we expect, anyway, because in addition to what I have said this morning, the Secretary of State has told Ofgem to toughen up on energy suppliers and to investigate customers’ experiences of how their supplier is performing. Following that, Ofgem established a new customer reporting system for households to pass on their experiences of how they are being treated. We are approaching this across the board. We believe, however, that any ban on the forced installation of prepayment meters would risk a build-up of customer debt. Unpaid debts increase costs for all energy consumers and could pose a risk to supplier stability.

To address issues around the forced installation of prepayment meters, Ofgem has recently published a new code of practice, as I mentioned. The code has been agreed with energy suppliers to improve protections for customers being moved involuntarily to a prepayment meter. It ensures better protections for vulnerable households, increased scrutiny of supplier practices, and redress measures where prepayment meters were wrongly installed. It includes provisions to prevent involuntary installations for all high-risk customers, including those dependent on powered medical equipment, people over 85, and households with residents with severe health issues. It also includes a requirement for suppliers to reassess whether prepayment remains the most suitable and preferred payment method for a customer once they have repaid debts. Suppliers must agree to any request from a prepayment customer who is clear of debt to move off a prepayment meter.

The rules to which suppliers must adhere regarding the installation of prepayment meters are set out in the licence conditions set by Ofgem as the independent regulator. Ofgem will undertake a formal statutory consultation process to modify suppliers’ licence conditions in line with the code ahead of this winter. This will allow Ofgem to use its full enforcement powers to enforce compliance with the code, ensuring that consumers are protected and that the poor practices that we have seen will not happen again.

It is vital that, as the independent regulator, Ofgem continues to set the rules to which energy suppliers must adhere in licence conditions. New clauses 2 and 38 would risk taking that power away from Ofgem. Allowing the Government to set rules outside the licence conditions would threaten Ofgem’s independence and its ability to regulate suppliers effectively.

The Government have always been clear that action is needed to crack down on the practice of forcing people, especially the most vulnerable, on to prepayment meters. We will continue to work closely with Ofgem and industry to see that the code leads to positive changes for vulnerable consumers. I hope that hon. Members are reassured by my explanation and that they might feel able to withdraw their new clauses.

[Alan Brown]

Despite what the Minister says, I am not fully convinced by those arguments. With the leave of the Committee, I will not press new clause 1 to a vote, but it is important to understand that new clause 2 would not even mean an outright ban on the installation of prepayment meters; it would just put protections in place so that people are not forced on to prepayment meters. It would also address debt build-up by ensuring that people are given access to debt counselling, for example. New clause 2 is about working with customers and providing additional protections, so I would certainly like to press it to a vote.

On new clause 1, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 2

Restriction of the use of prepayment meters

“(1) The Secretary of State may by regulations restrict the installation of new prepayment meters for domestic energy use.

(2) Regulations under subsection (1) may set conditions for energy suppliers in relation to the installation of new prepayment meters, including—

(a) ensuring consumers have given full and informed consent to the installation of a prepayment meter after having been offered access to a recognised debt counselling agency;

(b) ensuring vulnerable consumers are not required to use prepayment meters;

(c) publishing a non-exhaustive list of circumstances in which a consumer is considered vulnerable, including financially vulnerable; and

(d) ensuring consumers have a clear, timetabled route back to standard meters once specified conditions are met.

(3) In this section ‘installation of new prepayment meters’ includes switching existing energy meters to a prepayment mode.”—(Alan Brown.)

This new clause would allow the Secretary of State to restrict the use of prepayment meters, especially in relation to vulnerable consumers or where consumers are not aware they are being moved over to a prepayment mode.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Alan Brown]

I beg to move, That the clause be read a Second time.

This fairly simple clause seeks for the Government to include in all future legislative impact assessments a net zero compatibility test. Achieving net zero is vital to save to planet. The Government have legally binding targets to hit net zero by 2050, and this Committee has agreed to Government amendments that give Ofgem a statutory duty to consider net zero. If the regulator is obliged to consider net zero, and if the Government have legal targets to achieve net zero, surely it makes sense to legislate for the Government to undertake a net zero compatibility assessment, so as to ensure that policies will not have an adverse impact on the legally binding target to achieve net zero. That would result in transparency on whether policies are adversely or positively impacting on the route to net zero. Such transparency would also be of assistance with costs, especially given the net zero cynics among Government Members. Importantly, Energy UK, the trade body that represents energy companies, also says that it supports a net zero compatibility test.

Given what I have outlined, I do not see why the Government would not accept the new clause. If the Government can carry out impact assessments of the effect of legislation on small businesses, why not carry one out on the wider, legally binding target to hit net zero? I hope that the Minister will accept the new clause.

[Andrew Bowie]

I thank the hon. Members for Kilmarnock and Loudoun and for Argyll and Bute (Brendan O’Hara) for tabling their new clause. The Government agree with the intention behind it, but we believe that it is unnecessary. We are already taking a cross-Government and systematic approach to embedding net zero and climate into Government policies and decision-making processes.

The creation by the Prime Minister of the new Department for Energy Security and Net Zero, which I am proud to serve, means that there is an entire Department dedicated to delivering on our climate ambitions. The Department’s focus, alongside energy security, is driving overall delivery of net zero and maximising the economic opportunity that the transition presents. The new Department’s officials work with counterparts across Government to co-ordinate action, working particularly closely with the Cabinet Office and the Treasury to ensure that net zero is prioritised in Government policy and decision making, and that it aligns with our wider priorities.

We are also working with industry and stakeholders, which has led to the creation of the net zero council, the green jobs delivery group, the jet zero council and the local net zero forum. We also work closely with our devolved Administration colleagues. We have also gone further by creating the Domestic and Economic Affairs (Energy, Climate and Net Zero) Committee, which brings together senior Ministers from across Government to ensure a co-ordinated approach to delivering net zero across government. Additionally, we have provided Green Book supplementary guidance on the valuation of energy use and greenhouse gas emissions for appraisal. That guidance helps officials when undertaking options appraisal for policies, programmes and projects; building business cases; and when conducting impact assessments. I hope that provides the hon. Member with the reassurance that he needs to withdraw his new clause.

[Alan Brown]

The Minister smiled when he said he hoped that that would satisfy me. There is no surprise that it does not. He outlined the creation of the new Department for Energy Security and Net Zero, and the important thing is that the net zero compatibility test would apply to all legislation that the Government introduce from every Department, so it would make every Department start to consider the net zero implications of its policies. That is what is critical about this new clause. I do not wish to withdraw the motion.

Question put and negatived.

New Clause 6

Just Transition Commission

“(1) Within six months of the date on which this Act is passed the Secretary of State must by regulations establish a body to be known as the ‘Just Transition Commission’.

(2) Regulations under subsection (1) must provide for the purposes of the Just Transition Commission to include—

(a) the provision of scrutiny and advice on the ongoing development of just transition plans;

(b) the provision of advice on appropriate approaches to monitoring and evaluation; and

(c) consultation with such persons as the Secretary of State shall consider appropriate in relation to the delivery and likely impact of just transition planning.

(3) The Just Transition Commission must produce and lay before Parliament an annual report of its work.”—(Alan Brown.)

Brought up, and read the First time.

--- Later in debate ---

[Kerry McCarthy]

As I said, the Government have had their green jobs taskforce, and now they have the delivery group. They are also doing things on the nature side. I would argue that they should have had all the information and expert advice; it is all available out there.

What we need are more incremental steps. Rather than setting up a body, we need something concrete from the Minister on what the Government are doing, for example, to ensure that further education colleges are tying up with the potential needs of businesses in their areas. Some incredibly good further education colleges are working on that—going into schools, working with businesses and encouraging young people to look at those careers—but as I said it is piecemeal and depends on the quality of the college, and the relationship with other agencies in the local area. I sympathise with focusing on a just transition, but I have concerns about whether setting up another body is the way to do it.

[Andrew Bowie]

I thank the hon. Members for Kilmarnock and Loudoun and for Bristol East for their contributions. The Government agree with the intention behind the new clause; however, we already view transition as a consideration embedded across all Government policy actions. We are committed to managing the transition to net zero in such a manner that the positive opportunities are maximised for the economy and the population, while protecting individuals, communities and the economy.

Given that the majority of the low carbon economy lies outside London and the south-east of England, Government action to deliver our net zero commitment and build a low carbon economy will help to level up the UK and spur on the transition. That is demonstrated through the North sea transition deal agreement in March 2021, through which the UK became the first G7 country to agree a landmark deal to support the oil and gas industry’s transition to clean, green energy, while supporting 40,000 jobs in industrial heartlands across the UK.

Since delivering a net zero workforce transition needs joint action by Government, industry, and the education sector, the Government have established the green jobs delivery group. The group is headed up by Ministers and business leaders to act as the central forum for driving forward action on green jobs and skills, and has committed to publishing a net zero and nature workforce action plan in 2024, which will consider the workforce transition. We will continue to join up across the devolved Governments, who have already made excellent progress, with the Welsh Government having launched their net zero skills plan in March 2023, and the Scottish Government and Skills Development Scotland having launched their climate emergency skills action plan 2020-2025 in 2020.

[Alan Brown]

On working with the devolved Governments, does the Minister recognise that it is time for the UK Government to match fund the £500 million just transition fund that the Scottish Government have put in place?

[Andrew Bowie]

I thank the hon. Member for his intervention, and point him to the remarks that I just made regarding the huge investment that we are already making in the transition, the fact that we were the first G7 nation to sign a transition deal, and the £100 billion of private sector investment by 2030 that we hope to see, and that we are driving into British industries, supporting 480,000 green jobs by the end of the decade. We are looking to meet that target, unlike the Scottish Government’s green jobs target, which of course they have not met—alongside failing in four years out of five to meet their climate change targets, as was announced just last week. Since delivering a net zero workforce transition needs joint action by Government and industry, as I have said, we are continuing in that regard.

With respect to the scrutiny advised in the new clause, the Government already report progress on delivering our net zero ambitions through multiple channels—through parliamentary Select Committees, the Public Accounts Committee, independent bodies such as the National Audit Office, and—under the Climate Change Act 2008—the Climate Change Committee. I should point out that the hon. Member’s colleague and friend, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), has recently taken up the chairmanship of the Energy Security and Net Zero Committee, and will, I am sure, ably hold my Department to account. I hope that that provides the hon. Member for Kilmarnock and Loudoun with the reassurances that he needs to withdraw the motion.

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

It is a pleasure to serve under your chairmanship, Ms Nokes. I have asked a few written questions in this space and I agree wholeheartedly with my hon. Friend the Member for Bristol East that the just transition should have already started for many workers. A survey two years ago found that workers were looking to move from the fossil fuel industry to renewables but that they were being put off by training fees. I have asked repeatedly about that.

I asked the Department whether it knew what the average cost of retraining would be for oil and gas workers but was told that it does not know or does not hold that data. However, I have heard at first hand from oil and gas workers who want to move into renewables that they face training costs of many thousands of pounds and that the quality of such training is questionable in some places. Government inaction risks leaving those workers behind when they want to be part of the transition and already have transferrable skills in those industries. I also recently asked a question about the Department’s discussions with the offshore wind industry on recognising an energy skills passport to help oil and gas workers, but was told in response that no such discussions have taken place.

I thank the Minister for his kind words about a transition. However, when will we see action for oil and gas workers? When will the inaction turn into action and delivery so we can get on with developing the green skills we need in this country to deliver net zero and compete in a global market?

[Andrew Bowie]

I thank the hon. Member for Sheffield, Hallam for the tone of her words. The Government believe that the best way to secure jobs for oil and gas workers is to continue to give them support and, indeed, to support investment into the North sea, which not only provides secure employment for them now and into the future but provides for our energy security needs, which is something the Labour party might take note of moving forward.

As a representative of a constituency in the north-east of Scotland, I am fully aware of the pressures that workers in the North sea oil and gas industry face and the desires of many of them to transition to new green jobs. We see that in the city of Aberdeen, which is transitioning from being the oil and gas capital of Europe to the energy capital of Europe. That is why we have set up our green jobs delivery group and why we are identifying recommendations and actions for central and local government, industry and business, and the devolved Administrations.

We are also exploring how we can support local areas to deliver a successful transition, and the Department for Work and Pensions is expanding sector-based work academy programmes to help those who are out of work develop the skills they need to re-enter the job market. The programme runs in England and Scotland and is developed by jobcentres in partnership with employers and training providers. The Government take that incredibly seriously and I have a particular interest in the matter.

I thank the hon. Lady for her comments, but we are clear that it is very important to support people who are reskilling and upskilling from traditional oil and gas jobs into new green jobs, while also investing in our oil and gas industry to ensure that investment continues to support the traditional jobs that will be needed for some time yet.

[Alan Brown]

The Minister puts forward arguments that suggest the Government are doing a lot in terms of green jobs. The Government are doing some things, but not enough. That is the reality.

To go back to my intervention on the hon. Member for Bristol East, the CfD rules should have been changed years ago to incentivise supply chain development and create those homegrown jobs. Perhaps a just transition commission would have provided advice on how that procurement could have been taken forward. I want to revisit that. The Government should think and should speak to people engaged in the just transition commission. In the meantime, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 33

Purposes

“(1) The principal purpose of this Act is to increase the resilience and reliability of energy systems across the UK, support the delivery of the UK’s climate change commitments and reform the UK’s energy system while minimising costs to consumers and protecting them from unfair pricing.

(2) In performing functions under this Act, the relevant persons and bodies shall have regard to—

(a) the principal purpose set out in subsection (1);

(b) the Secretary of State’s duties under sections 1 and 4(1)(b) of the Climate Change Act 2008 (carbon targets and budgets) and international obligations contained within Article 2 of the Paris Agreement under the United Nations Framework Convention on Climate Change;

(c) the desirability of reducing costs to consumers and alleviating fuel poverty; and

(d) the desirability of securing a diverse and viable long- term energy supply.

(3) In this section ‘the relevant persons and bodies’ means—

(a) the Secretary of State;

(b) any public authority.”—(Dr Whitehead.)

This new clause and NC34, NC35 and NC36 are intended as a suite of purpose and strategy clauses for this Bill.

Brought up, and read the First time.

--- Later in debate ---

The Minister may formulate his response in words such as, “We will go away and have a good look at this and see if there are things we ought to do to cause this change to take place.” If the Minister said that, I would be happy not to press the new clause to a Division, providing he acknowledges in clear view of the Committee that it is a good thing that what the North Sea Transition Authority says and does are both firmly rooted in proper legal provision.

[Andrew Bowie]

I thank the hon. Member for tabling his new clause and for his attempts at my reformation. To be clear, the new clause would change the name of the Oil and Gas Authority and introduce an express obligation for it to ensure the transition to net zero in carrying out its functions.

In March 2022, the Oil and Gas Authority changed its trading name to the North Sea Transition Authority, or NSTA. The change, supported by the Government and the Opposition, reflects the expanded role the NSTA plays in our transition to a net zero economy.

Under the new clause, the name change would occur only in the Energy Act 2016. However, as the hon. Gentleman admitted, the Oil and Gas Authority is mentioned in a large amount of primary and secondary legislation, which would also require amendment. Any partial change of name could undermine or change the NSTA’s statutory functions, powers and objectives. However, the Government recognise the importance of the change and, as we speak, we are considering legislative options to amend the authority’s statutory name to the NSTA in all places where it occurs.

--- Later in debate ---

[Dr Whitehead]

Indeed there is a feeling welling up in me that we are not able to proceed with the new clause, given that the Minister said—and I agree—that such a change cannot be made easily with a quick stroke of a pen, and that a number of other things need to be considered alongside that. I am pleased that he indicated that, as we speak, there are serious people with towels round their heads working through the implications and looking at how we can best do it. That was the intention of the new clause, but perhaps I was rather optimistic in thinking that the name change could be written in easily. I appreciate that it cannot.

I also appreciate that the transition authority has the green light from Government to start undertaking things relating to transition. It is beginning to pursue that, and that is all good, but I say gently to the Minister that at some stage we will need to push this together. If the gentlemen with wet towels round their heads—

[Andrew Bowie]

And ladies.

[Dr Whitehead]

And ladies, indeed. If they can undertake their work in a reasonable fashion, I hope we will have a solution that is good for all of us, as far as the transition is concerned. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 44

Maximum economic recovery in the North Sea

“(1) The Petroleum Act 1998 is amended as follows.

(2) Omit sections 9A to 9I.”—(Dr Whitehead.)

This new clause removes reference to Maximum Economic Recovery in the North Sea as placed into the Petroleum Act 1998 by section 41 of the Infrastructure Act 2015.

Brought up, and read the First time.

--- Later in debate ---

Water levels are rising, and will continue to rise beyond 2100, meaning that significant parts of the UK will be under water and people will be displaced. We are seeing real, measurable effects, and things are quickly getting worse. Just look at the oceans and the temperatures at the moment. There is an unprecedented rise in the temperature of UK waters, and it will have a devastating effect if it continues. It is so important that we see things in the round and do not just say, “This is how much we need. If we continue to burn as much as we can today, we will be all right as long as we stop by 2050.” That is not the outcome we want. We want a just transition that slowly helps us get to that point and stops us turning off the gas tap at the point of no return. We need a planned way forward that helps us not face economic ruin.

[Andrew Bowie]

I thank the hon. Members for Southampton, Test, and for Sheffield, Hallam, for their impassioned contributions to the debate. There has been talk of apocalypse and catastrophe, and there has been some idea that the country is not taking the issue seriously. The hon. Member for Sheffield, Hallam suggested that we were just setting a date and hoping for the best. Nothing could be further from the truth. We have decarbonised faster than any other G7 nation. Off the coast of this country are the first, second, third and fourth-largest offshore wind farms in the world. We created an entire Department to focus on the challenges of net zero, and we are passing this Bill, which will enable us to unlock so much of what we need to do to move this country forward even more quickly.

There was talk of economic illiteracy, but it is economic illiteracy not to support our outstanding British offshore oil and gas industry as it continues to produce the oil and gas that is required to keep the lights on in this country as we transition to a net zero future. It is the safest, most responsible offshore oil and gas sector in the world. Indeed, by 2035 we will have the first net zero offshore oil and gas sector, and the North sea will be the first basin in the world to be a net zero basin. I urge colleagues to stop talking down this Great British success story and start talking it up, as it contributes so much to our energy security and net zero ambitions.

[Olivia Blake]

I think the Minister completely missed the point of what I was saying. I am in no way doing down the industry. I am saying that there are financial risks linked to our climate risks, and they must be brought into this debate. That is fundamental, and future Governments will not thank us if we do not discuss and address that now.

[Andrew Bowie]

I could not agree more that there are financial risks. That is probably why, just this morning, so many businesses expressed their worry at Labour’s Just Stop Oil plans, which were outlined a couple of weeks ago and which the former Labour leader of Aberdeen City Council described as even worse for an industry than the actions of Margaret Thatcher in the 1980s. That is from a member of the Labour party who resigned due to Labour’s policies on oil and gas.

[Dr Whitehead]

I would be grateful if the Minister withdrew that comment about Labour’s “Just Stop Oil plans”. There are no Labour Just Stop Oil plans. Indeed, Labour has condemned the activities of Just Stop Oil protesters, because Labour does not wish just to stop oil. We specifically said this morning that we do not wish to do that, and that we see a substantial role for the North sea oil and gas industry out to 2050. We would support that future, so I hope the Minister will not resort to these easy gibes and will address the issue rather more seriously today. That would be helpful.

[Andrew Bowie]

I should probably turn to the new clause, but I welcome the welcome and support that the hon. Gentleman—and now, it seems, the Labour party—will give to our offshore oil and gas industry. He should probably inform the members and founders of Just Stop Oil who have donated so much money to his party.

The objective of maximising economic recovery in the North sea forms the basis of the North Sea Transition Authority’s regulatory functions, and removing them could significantly undermine its ability to operate as intended. It would also lead to a significant lack of clarity about the authority’s regulatory role. Maximising the economic recovery of oil and gas need not be in conflict with the transition to net zero, and the North Sea Transition Authority is already doing a great deal of work to support an orderly transition that delivers on our climate commitments and supports workers.

In December 2020, in accordance with section 9A of the Petroleum Act 1998, the North Sea Transition Authority published a revised strategy, titled “The OGA Strategy”.

[Dr Whitehead]

Ah!

[Andrew Bowie]

It is rather ironic, given what we have just been discussing. Through the revised strategy’s central obligation, the North Sea Transition Authority must

“secure that the maximum value of economically recoverable petroleum is recovered from the strata beneath relevant UK waters; and, in doing so, take appropriate steps to assist the Secretary of State in meeting the net zero target”.

The strategy therefore already provides a basis for the North Sea Transition Authority’s ongoing work to help drive the energy transition.

Under the revised strategy, the North Sea Transition Authority has also introduced new expectations for how North sea oil and gas assets will be managed in the least polluting way, and it will consider the full societal carbon cost when taking decisions. The North Sea Transition Authority will continue to work with Government, industry and other regulators to help accelerate the move to net zero while meeting the UK’s energy demands and need for energy security.

Section 9D of the Petroleum Act 1998, on reports by the Secretary of State, was repealed by paragraph 10 of schedule 1 to the Energy Act 2016, which means the repeal happened before any reports needed to be produced.

I pay tribute to our offshore oil and gas industry, particularly Offshore Energies UK and its “Vision 2035” plan, which means the North sea will become the world’s first net-zero basin. With these explanations, I hope the hon. Gentleman feels able to withdraw his new clause.

[Dr Whitehead]

I thank the Minister for clarifying the position on reports, because I must admit that I had not read that paragraph of the 2016 Act. It rather underscores my point that this is a performative piece of legislation. There were requirements to report, but the Government presumably realised that they were even sillier than the original imposition on the 1998 Act and decided, one year later, that reports would not be necessary. It could have been a bit embarrassing if the reports came out, so they decided that the reports were not necessary. I thank him for that clarification, but he is rather speaking to my point instead of his.

I am very disappointed that the Minister has sought to characterise our debate as one side of the Committee being against oil and gas and the other side being in favour; he thereby swerves the important point raised by my hon. Friend the Member for Sheffield, Hallam. On the overall position that maximum economic extraction could lead us—

Energy Bill [ Lords ] (Fourteenth sitting)

Andrew Bowie Excerpts

Committee stage
Thursday 22nd June 2023 Public Bill Committees

[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.

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

indicated dissent.

[Alan Brown]

The Minister can shake his head but that is a fact.

--- Later in debate ---

[Alan Brown]

I understand the point that Government Members are trying to make but, at the end of the day, if we are shipping coal to Germany, we are still increasing UK shipping emissions. We are increasing emissions from the UK to about 400,000 tonnes of CO₂. In the global context, there is no saying whether those coal emissions are getting displaced if the coal is going to Germany, so we cannot guarantee a reduction in global emissions. We would be putting more coal on the market, which is coal somebody else will snap up elsewhere. The likelihood is that we would actually increase emissions.

I should have said in my opening remarks that I represent a former coalmining area, so I recognise the devastation caused by pit closures. My area recovered some jobs through open-cast coalmining, but even that industry collapsed a few years ago, leaving us with devastating blights on the landscape and huge craters that needed filling. Unfortunately, again, there was no help from the UK Government when we needed it. I understand the legacy of coalmining and I want support for these areas, but opening new coalmines is not the way to do it.

We cannot turn back the clock. What we need to do is create jobs for the future. We need green-based jobs in coalmining areas such as mine, using geothermal energy and making use of the closed mines. Let us make them an asset for the future, providing clean energy and reducing energy bills at a local level.

The Committee will be pleased that I am bringing my monologue to an end. I hope that my comments are going to convince the Government and Conservative Committee members that there is no need for new coalmines going forward. I would be delighted to hear the Minister, in his summing up, say that he is not going to move against clause 270, but is going to retain it and listen to those of us who want it.

Clause 271 is to be replaced by new clause 52. I welcome the Government’s change on that and their making reaching net zero a statutory duty of Ofgem. Will the Minister tell us whether new clause 52 and Ofgem’s new statutory duties will make it much easier for Ofgem to allow anticipatory investment? That has been one of the issues, so we want to make sure that it can do that and do that forward plan-ahead, rather than building more constraints into the grid while upgrading it at the same time.

Turning to clauses 272 and 273, it seems like for ages Energy Ministers have stated their support for the principle of the Local Electricity Bill—community electricity generation and the sale of electricity locally—but they have always said that the Bill was not the right solution to facilitate that. The original drafters and MPs who have tried to bring forward private Members’ Bills have changed the Bill to try to address the concerns of Ministers, but that still was not enough.

The cross-party group of peers who drafted clauses 272 and 273 to mimic the effect of the Local Electricity Bill again tried to address the Government’s concerns. I fail to understand why the Government are still against the two clauses. It is worth pointing out that 323 MPs overall, including 128 Tory MPs—let alone myriad local authorities, environmental groups and individuals—have supported the Bill. The feet-dragging makes no sense. I commend the hon. Member for Bristol East for pointing out that the Minister himself was a signatory to the Local Electricity Bill. I wonder what about a ministerial car made him change his mind about supporting it.

[Andrew Bowie]

Jealous!

[Alan Brown]

Not of one down here!

Community energy schemes have seen almost no growth for six years, despite renewables clearly being cheaper than ever. Of course, that is tied in with the removal of feed-in tariffs, which were very successful in delivering the likes of small-scale hydro across the highlands, for example.

The Government are pressing ahead with voting to remove clauses 272 and 273. What are their proposals for facilitating community energy generation and providing the certainty of price that groups and companies need to be able to move forward? The Minister must be aware that the smart energy guarantee does not deliver at present and, as I say, there has been no growth in community energy schemes in six years.

At the moment, community energy schemes account for just 0.5% of the UK’s electricity. According to the Environmental Audit Committee, that could increase twentyfold in 10 years, so something like 10% of energy by community generation could be achieved in 10 years if the right conditions are put in place. Even if that is overstated and the reality is only 5%, that would still represent a huge shift in generation and would provide local grids with stability and resilience. That would be much better value than the new £35 billion Sizewell C nuclear station.

If we consider nuclear, price certainty is not a new concept. It underpins the contract for difference auction rates, and it is what is provided for Hinkley Point C. A great example of the potential scope for community energy generation is a study being undertaken in my constituency by the Newmilns Regeneration Association, which is investigating the installation of solar panels on the brownfield site of the former Vesuvius factory. The aim is to sell electricity to local industry, reducing its bills and helping it to be sustainable, and for Newmilns to be a net zero town going forward. The national regulatory authorities believe that the Local Electricity Bill, or the alternative in the form of clauses 272 and 273, needs to be in place to facilitate trading of the electricity that would be generated. That is why I fully support the clauses’ retention in the Bill.

Clause 272 would provide guaranteed income for electricity for small-scale renewable energy generators, and clause 273 would enable community schemes registered under the clause 272 guarantee to sell the electricity they generate locally. The Committee Clerks circulated additional written evidence today, in which professors from the University of Manchester say there should be no fear about clauses 272 and 273, because they will not unduly affect the prices that suppliers have to pay for electricity; at worst, the effect will be marginal. They also recommend that the Government retain the clauses. I really hope that they do.

--- Later in debate ---

[Andrew Bowie]

It is a pleasure to see you back in the Chair and to serve under your chairmanship, Mr Gray.

[The Chair]

It is a pleasure to see you.

[Andrew Bowie]

Well, I hope it will remain a pleasure—I am sure it will. Here we are on day eight, sitting 15 of the Committee. There has been a comprehensive debate on the clauses, and I thank all Members on both sides and from all three parties represented for their full contributions. I will respond to some of the points that were made.

The hon. Member for Stretford and Urmston just referred to the Ofgem net zero duty. I am delighted that the Committee has welcomed the Government’s commitment on the duty and our new clause, and I pay tribute again to Members across the House and in the other place for their constructive dialogue on the issue. I confirm to the hon. Member for Kilmarnock and Loudoun that the measure will allow for anticipatory investment. I have engaged with industry and others, and they are confident that that is the case and welcome this step.

Community energy projects can have real benefits for the communities in which they are based, which is why so many Members supported the private Member’s Bill on the issue. However, the Government and I do not believe that every consumer should have to bear the cost of such projects. That does not seem a fair way to fund them.

[Kerry McCarthy (Bristol East) (Lab)]

Will the Minister explain why he does not think that consumers should bear the cost of community energy projects but does think that they should bear the cost of new hydrogen, through the hydrogen levy? That seems rather inconsistent.

[Andrew Bowie]

As the hon. Lady knows, we are listening and acting on the concerns raised by many in this place and the other place, including on Second Reading in the Commons, when issues regarding the hydrogen levy were raised. I am sure that we will have much more to say on that when the Bill comes back to the Floor of the House.

I am also not convinced that the Lords amendments tackle the real issues faced by community energy groups: high start-up costs and lack of expertise. I have had positive engagement with Members on that. The Government are therefore considering other options that could tackle such issues in a fairer and more proportionate way ahead of Report stage. I hope that members of the Committee and those who are following our proceedings with interest are reassured by those comments.

The hon. Member for Kilmarnock and Loudoun spoke at length, as did other Members—I hope to cover most contributions in my response—about coal. The hon. Gentleman specifically mentioned exporting coal to Germany. It is rather ironic that the only reason that Germany is importing coal is its nonsensical position on nuclear and new nuclear power—a position that is shared by the Scottish Government in Edinburgh. The hon. Gentleman might want to take that away and consider it.

The hon. Gentleman also mentioned that he disagreed with the comment by my hon. Friend the Member for South Ribble that the debate in Committee the other day was one of the “most jaw-dropping” moments of her political career, given the events of the week. I concur with the hon. Gentleman that that was a bit surprising, given that this was the week that a former leader of Aberdeen Labour claimed that Labour’s energy policies were the “final straw”—this is a Labour councillor saying this—and that

“Margaret Thatcher never delivered a more brutal put down of an industry than that delivered by Keir Starmer in Edinburgh.”

In the same week, a Green Minister in the Scottish Parliament faced a vote of no confidence, the Whip was withdrawn from a former SNP Minister, and a person of interest in an ongoing police investigation professed their innocence but could not do the same for another person of interest, to whom she is married. The last week was quite an exciting week for politics—I agree.

Our reliance on coal is rapidly diminishing, but there is still a need for it in industries such as steel and cement, so now is not the right time to make these licensing changes. I thank colleagues, including my hon. Friend the Member for South Ribble, for highlighting the role that these industries play in our constituencies, where they provide jobs and contribute to the economy.

[Alan Brown]

On coalmines, what does the Minister think about the suggestion from the hon. Member for Hitchin and Harpenden that any new licences could be supplied on the condition that the coal be sold only on the domestic market?

[Andrew Bowie]

I would not like to shut down any of the ideas put forward by my hon. Friend the Member for Hitchin and Harpenden; the Government will consider all suggestions for the future licensing of coalmines. I do not want to go down a rabbit hole and make commitments on matters for which I may not be responsible in future.

I found the comments by my right hon. Friend the Member for Elmet and Rothwell fascinating, as I do all his comments. I was particularly interested in his intervention on the hon. Member for Southampton, Test regarding the situation in Germany, which I also referenced.

A number of Opposition Members mentioned the coalmine in Cumbria. The decision by the Secretary of State for Levelling Up, Housing and Communities followed a comprehensive planning inquiry, which heard from 40 witnesses, and considered matters including the demand for coking coal and its suitability, climate change, and impact on the local economy. The full reasons for the Secretary of State’s decision are set out in a published letter, which should be read in its entirety, but he concluded that

“there is currently a UK and European market for the coal,”

and that

“it is highly likely that a global demand would remain”.

Alongside that, the UK is working to support the decarbonisation of steel and other industries that still rely on coke and coal through our £315 million industrial energy transformation fund, which helps businesses with high energy use to cut their energy bills and carbon emissions by investing in energy efficiency and low-carbon technologies.

For those reasons, I do not agree with the hon. Members for Bristol East, for Southampton, Test, and for Sheffield, Hallam. A complete ban is not appropriate, and risks our having to meet future demand for the industries that I mentioned from our own resources. The hon. Member for Sheffield, Hallam—I am sorry that she is not here today—mentioned the Government’s commitment to COP26. As I said in my opening remarks, coal’s share of our electricity supply has already declined significantly in recent years; it has gone from providing almost 40% of our electricity in 2012 to less than 2% in 2021. I do not agree with professions from Opposition Members that we are surrendering our lead on climate issues to the Biden Administration in the USA. It is not for me to question the decisions of that Administration, or to say whether they are for good or ill, but they have just approved a drilling licence in the Arctic circle, so I suggest that our lead on these issues remains extant.

[Alan Brown]

Remember, we are talking about comments from not just Opposition Members; comments about us losing our international lead were made by the right hon. Member for Kingswood, who did a net zero review; the COP26 President, the right hon. Member for Reading West; and the chair of the Climate Change Committee. That is three senior Tories who are saying that the UK is losing its international lead.

[Andrew Bowie]

I recognise that. I speak with my right hon. and hon. Friends on thisissue and others, and I understand the concerns, including those of Committee members. However,I reassure all right hon. and hon. Members that phasing out unabated coal power generation within timeframes that keep 1.5°C within reach remains a key UK Government priority, and the Government are leading on that. That builds on our COP26 energy transition legacy, which included securing agreement to accelerate efforts

“towards the phasedown of unabated coal power”

in the Glasgow climate pact, our co-leadership of the Powering Past Coal Alliance, and launching an international just transition declaration at the Glasgow summit. I would be very surprised if we did not return to some of these issues on Report, but I hope that the Committee will carefully consider my remarks.

[The Chair]

I call Alan Brown, if he wishes to wind up.

--- Later in debate ---

[The Chair]

With this it will be convenient to discuss the following:

Government amendment 20.

That schedule 7 be the Seventh schedule to the Bill.

Clause 133 stand part.

That schedule 8 be the Seventh schedule to the Bill.

Clauses 134 and 135 stand part.

Government amendment 19.

[Andrew Bowie]

I now return to part 4 of the Bill, which relates to the independent system operator and planner, or ISOP.

Clause 132 introduces schedule 7. The purpose of the schedule is to empower the Secretary of State to make transfer schemes to create the ISOP and give it the capacity to carry out its functions. As discussed already, the ISOP will be founded on the existing capabilities and functions of National Grid Electricity System Operator and, where appropriate, National Grid Gas. That will require several transactions between Government, National Grid plc and other relevant parties, because the property that the ISOP requires is not currently owned by a single entity. The transfers could include matters such as personnel, IT systems, physical assets, methodologies, models, data, and other resources and inputs used by the existing entities in performing their functions.

Schedule 7 sets out a set of principles, procedures and expectations in relation to the transfer scheme that will help provide clarity to affected parties. For example, it outlines that the Government are required to consult the transferor or transferors when the transfer scheme power is expected to be used. Not all the detail of the scheme can be determined in advance, so the Bill also includes a small number of time-limited powers to make regulations, which include regulations to provide further details to all parties, including third parties, on procedures for agreeing and paying compensation.

Government amendment 19 makes a minor procedural amendment to clause 275, to include the Treasury in the list of persons that can make regulations under the Bill. Amendment 20 clarifies that, because regulations under paragraph 9 of schedule 7 deal with financial matters, they can only be annulled in the House of Commons.

Clause 133 introduces schedule 8, which relates to pensions. As part of the transfer of functions, some employees will transfer into the ISOP. The purpose of the schedule is to allow the Secretary of State to separate the pension arrangements of the ISOP and to provide scope for various forms of reorganisation that may be appropriate in the light of the transfer. That includes making provision for the responsibility for the affected employees’ qualifying pension schemes and protecting the value of their benefits during the transfer. In exercising powers, the Secretary of State must ensure that the arrangements made for each employee’s pension provision is, in all material respects, at least as good immediately after any transfer-related changes are made as they were before that point.

Clause 134 grants the Secretary of State the power to provide financial assistance to the ISOP—that is, to draw on the financial resources available to Government in the kind of circumstances when the existing electricity system operator and gas system operator would have relied on the financial strength of their corporate group to raise capital sums. The Secretary of State will have the power to set conditions on the financial assistance provided, which may include conditions about repayment with or without interests or other return. In the highly unlikely situation that the ISOP faces financial difficulty, the power would also allow the Secretary of State to step in and avoid any disruption to the electricity and gas sectors.

Finally, clause 135 removes the barriers, in section 7 of the Electricity Act 1989 and section 7B of the Gas Act 1986, to payments raised in one sector being used to benefit consumers in the other. It also introduces a provision, in each Act, to expand licence holders’ statutory duties and require them to have regard to the interests of consumers of the other energy sector where directed by their licence. The removal of such barriers is fundamental, because it will enable the ISOP to co-ordinate and ensure strategic planning across the energy sector more effectively.

[Dr Whitehead]

We come to a part of the Bill that we should have discussed a couple of weeks ago: clauses 132 to 139. When we discussed the rest of the business relating to the ISOP, these debates were moved by the Government towards the end of the consideration of later clauses in the Bill. At the time, I thought that was because there was some blockbusting new clause that the Government were thinking of introducing, which was not quite down the slipway at that point. I thought it would appear when we considered the clauses today.

I was disappointed to see that nothing has appeared. There are two Government amendments that were there previously, and nothing in the way of new clauses. I assume the reason for discussing the provisions now—although the Minister may have an interesting explanation up his sleeve—may well be because Ofgem has just produced a consultation—[Interruption.] No, the Minister is shaking his head. In any event, had the Minister consulted with Ofgem about whether it was going to produce a consultation on transfers and various other things, then he would have found that they have produced a consultation, “Funding the transition to a Future System Operator”, which was published today. The Minister will understand that not a great deal of time has elapsed since the publication of that consultation.

That consultation is very relevant to the provisions we are discussing. If the Minister did think the consultation would be published in time, it would have been helpful of him to bring that to the Committee’s attention. Apparently, however, there are different reasons for discussing these provisions later in the Committee cycle than planned.

A headline in Utility Week said the full costs of the transition to a future system operator could come to about £392 million. I read that headline but I am too mean to go behind the paywall of Utility Week to read the rest of the article. I sought out the Ofgem consultation instead and got the full picture. The consultation indicates that this level of cost for the transition is accurate. In clauses 132 to 139, provision is given for the bringing together of the various agencies’ present responsibilities for what would be the new independent system operator. That extends beyond just taking the National Grid ESO away from National Grid and putting it into ISOP. It involves other agencies—the Minister is absolutely right.

In this instance, however, the prime issue of the transition is of course the ESO itself. At the moment and for a long time, the ESO has had a relationship with National Grid involving separation by Chinese walls. It was, in effect, owned by National Grid and so was part of the National Grid family of companies, but over the recent period, since the ESO was set up, its operation has been separated from that of National Grid. Previously, we have discussed the extent to which the Chinese walls were strong enough for what ESO was doing in relationship to what National Grid might be doing—for example, potential conflict on interconnectors, with National Grid owning at least part of an interconnector while ESO was planning for interconnectors overall.

The fact that the separation will take place and that the business of the ESO will be transferred fully into the ISOP is important. That will complete the process of setting up the ISOP properly, so that it can operate fully independently from day one—in Committee, we have expressed strong interest in ensuring that. However, with the Ofgem consultation, the issue of compensation for those transfers arises to some extent. According to the consultation, part of the transfer arrangements relates to transferring personnel across and part to what assets and so on will be transferred. What is not entirely clear in the consultation is also alluded to in the provisions in the group, in particular schedule 7.

Paragraph 8 of schedule 7, headed “Compensation”, appears to start talking about compensation in general terms for, as it were, the loss to National Grid of its ownership of the ESO, as well as of the various things relating to the transfer of assets and individuals. Compensation would be couched in two parts: literally, which desks and pot plants are going over to the ISOP, with personnel and various other things, and what the compensation for that is, presumably; and compensation for the fact that the ESO was part of the National Grid corporate family and no longer will be.

I am not clear whether the provision on compensation encompasses that consideration. If so, what might that consideration be? Do the Government have a figure in mind for compensating National Grid for its losing ESO to the ISOP? Is that facilitated through these clauses or a separate arrangement to be arrived at? In other words, do the clauses deal just with compensation relating to bodies, pot plants and desks, or with compensation more widely?

That is important, because schedule 7—and, indeed, the explanatory notes to the Bill—sets out how issues of compensation may be resolved by bodies that have either received it or been subject to providing it. From one end, there are clauses—I do not have to hand the exact detail of which ones—relating to the Government providing the ISOP with funding from various sources—[Interruption.] The Minister is beginning to look for inspiration; I hope that it will come.

[Andrew Bowie]

Inspiration has arrived.

[Dr Whitehead]

Good.

As I was saying, this is potentially important, because the clauses in this part of the Bill relate to the Secretary of State’s ability to provide the ISOP with finance. Will the ISOP undertake the job of providing the compensation due under the clause—presumably it would be provided with money by the Government to do that—or will the Government deal with that separately before the ISOP is set up?

There is also an important point about compensation for the loss of the ESO to the ISOP. It would seem inappropriate for the ISOP to pay compensation to National Grid, given its removal from National Grid in the first place. I therefore assume that other mechanisms will be in place to provide that compensation. If that compensation is paid, there are provisions in the Bill allowing for such payments to be recovered by companies involved in the process in the course of their activities. [Interruption.] I will pause for a moment while the Minister consults his Whip.

[Dr Whitehead]

This is something I specifically want the Minister to say something about. It is important that we get it right.

Assuming that compensation is given for the loss of the ESO and the companies concerned can recover that, do the Government intend for the ISOP to have a part in the mechanism whereby costs are recovered through standing charges on bills? As the Minister knows, standing charges are substantially made up of a combination of charges for TNUoS and DUoS—transmission network use of system and distribution use of system—and a balancing charge, and, as he and other hon. Members will know, standing charges are increasing substantially as a proportion of our electricity bills. They are now about 25% of our energy bills.

It looks as if the compensation, if it can be recovered by somebody—I assume it could be recovered one way or another by National Grid in its network charges, or by the ISOP in what it eventually contributes to the standing charge—will eventually work its way into the standing charge, and hence on to customers’ bills. That makes it important to understand what the Government have in mind about what compensation should be paid to National Grid for the loss of ESO and its transfer to the ISOP.

It may be that there has been a nice agreement that no one will pay anyone compensation, and National Grid will just hand over ESO to the ISOP. I suspect that is not the case, but I have not seen anywhere—and it is not explicit in the consultation—what the level of compensation might be, who will pay it, how it might be transferred to bills and standing charges, if necessary, and how the process overall might work. It would be helpful if the Minister could give us an understanding of all that. It would certainly enable us to better judge schedule 7, as it relates to the process of how those transfers take place and what their consequences are.

[Andrew Bowie]

On the question of why we have returned to these clauses, I am sorry that I was unable to turn up today with a blockbuster moment for the Committee. I know they were all expecting it and waiting with bated breath. Unfortunately, it is a simple matter of procedure. We temporarily skipped over the remaining clauses in part 4 to ensure that the necessary Ways and Means motion could be agreed by the House. I am pleased to confirm that the resolution was obtained on Tuesday, allowing us—I was expecting a “Hear, hear!”—to continue with clauses 132 to 139.

The Ways and Means resolution was necessary as a result of provisions that confer power on the Treasury to make regulations setting out the way taxes have effect in connection with a transfer of assets from one body to another. It was impossible to proceed with debate on the clauses until the motion was passed by the House. That has now been done, so we can proceed.

On the consultation that was published this morning, I cannot mandate when Ofgem publishes its consultations, so unfortunately that was not a consideration. However, we note that the Ofgem consultation launched today, and I will of course consider it in detail. I am happy to provide hon. Members with more detail in writing should they wish.

The hon. Member for Southampton, Test spoke about transfers. The Bill provides multiple steps for agreement on the value of compensation: first, simple agreement between parties—in this case the Secretary of State, National Grid and the owners of National Gas—secondly, in a situation of non-agreement, the joint appointment of an independent valuer to assess the value of the assets to be transferred; or, thirdly, as a fall-back option, the appointment of an independent valuer by the Secretary of State on behalf of both parties. The framework of considerations to be made by the independent valuer will be set out in regulations to be made under the Bill.

The entire process is an ongoing commercial transaction, so the Government are limited in the extent of the information they can provide at this point, although I recognise the importance of the hon. Gentleman’s questions. I will respond specifically to his point about the standing charge and his worry that that could have an effect on bills. We do not expect costs to rise at all as a result of the establishment of the ISOP. The ISOP will be funded by Government, and its ongoing operations will continue to be supported by funding from the network balancing charges at a level determined through a price-control mechanism, much like the current gas and electricity system operators are. However, we expect the ISOP to enable a long-term reduction in costs compared with the status quo.

[Dr Whitehead]

I think the Minister just said that he expects compensation to be included in network charges, which means that in the end it will go on standing charges for customers. There will be an effect on customers’ bills.

[Andrew Bowie]

I reiterate that we are not expecting any increase in customers’ bills as a result of the creation of the ISOP. There will be no increase. We expect the ISOP to enable a long-term reduction in costs, so its creation will have the opposite effect on customers’ bills. Future network decisions will be built on the expert and impartial advice of the truly whole-system body that many in the industry and outside it have been calling for for some time.

[Dr Whitehead]

I appreciate that the Minister cannot tell me—presumably because of an ongoing discussion relating to commercial companies—what the compensation for National Grid is likely to be. However, I assume that, in stating that he cannot tell me, he has confirmed that that will be part of the transfer arrangements. I was trying to distinguish between the compensation for pot plants and desks, and compensation for the loss of the ESO by National Grid.

That leads us to an unsatisfactory position in which we do not know how much the compensation will be. Presumably, we have to take it on trust that the Government will be fairly rigorous about ensuring that the compensation is proportionate to the actual loss, but I am not sure how it will be determined. Sorry, Mr Gray, this is a long intervention.

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[Andrew Bowie]

Let me briefly answer those points. As I have set out, this is an ongoing commercial discussion between parties. The Bill provides multiple steps for agreement on the value of compensation, which has yet to be determined, and I do not think that it would be good governance to insert a ballpark figure into the Bill. I cannot underline enough that the creation of the ESO will not have any adverse effect on consumers’ bills. In fact, as a result of it, we will see bills reduce in time. I am happy to write to the hon. Gentleman with more information.

Question put and agreed to.

Clause 132 accordingly ordered to stand part of the Bill.

Schedule 7

Independent System Operator and Planner: transfers

Amendment made: 20, in schedule 7, page 282, line 7, at end insert—

“(3A) A statutory instrument containing regulations under this paragraph is subject to annulment in pursuance of a resolution of the House of Commons.”—(Andrew Bowie.)

This amendment provides for a statutory instrument containing regulations made by the Treasury under paragraph 9 of Schedule 7 to be subject to annulment in pursuance of a resolution of the House of Commons.

Schedule 7, as amended, agreed to.

Clause 133 ordered to stand part of the Bill.

Schedule 8 agreed to.

Clauses 134 and 135 ordered to stand part of the Bill.

Clause 136

Principal objective and general duties of Secretary of State and GEMA under Part 4

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clause 137 stand part.

That schedule 9 be the Ninth schedule to the Bill.

Clause 138 stand part.

Government amendment 18.

Clause 139 stand part.

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[Andrew Bowie]

Clause 136 ensures that when carrying out various functions in relation to the ISOP under the Bill, the Secretary of State and Ofgem must have regard to their principal objective and general duties as defined in the Electricity Act 1989 and the Gas Act 1986. The principal objective of the Secretary of State and Ofgem can be characterised as protecting the interests of existing and future electricity and gas consumers. General duties include promoting effective competition in the energy sector, having regard to security of supply and securing a healthy energy market.

It is relatively common to extend the application of those principles where a new Act gives new, freestanding functions to the Secretary of State or Ofgem. The clause states that the Secretary of State must have regard to the principal objective and general duties when carrying out new functions relating to designation under clause 120 or when making an order that an existing transmission licence becomes the ISOP’s electricity system operator licence.

Clause 137 introduces schedule 9, which contains necessary consequential amendments to the Gas Act and Electricity Act to enable the ISOP and its licensable activities to be integrated into the existing framework of the energy system regulated by Ofgem.

Clause 138 contains provisions on the interpretation of terms used in part 4 of the Bill. I draw hon. Members’ attention in particular to subsection (3), which is intended to make it clear that whenever part 4 includes a proposition about the ISOP’s functions, that is to be understood as applying to any and all of the ISOP’s functions, whether provided by the Bill, by other legislation, or as functions ancillary to them.

Clause 139 concerns the limited regulation-making powers in part 4. Government amendment 18 is consequential on Government amendment 20, which we have already discussed. It ensures that regulations made by the Treasury under schedule 7(9) are not subject to the negative procedure. As these are financial regulations, the intention is for them to be laid before the House of Commons only and approved by the House of Commons alone.

[Dr Whitehead]

These measures are essentially consequential on those we have already discussed. I have no particular comment to make on them other than to say hooray; I am happy to let them go through undiscussed.

Question put and agreed to.

Clause 136 accordingly ordered to stand part of the Bill.

Clause 137 ordered to stand part of the Bill.

Schedule 9 agreed to.

Clause 138 ordered to stand part of the Bill.

Clause 139

Regulations under Part 4

Amendment made: 18, in clause 139, page 122, line 32, at end insert—

“(2) Subsection (1) does not apply to regulations under paragraph 9 of Schedule 7.”

This amendment excludes regulations made by the Treasury under paragraph 9 of Schedule 7 from the provision about negative procedure in Parliament made by clause 139. This is consequential on Amendment 20.—(Andrew Bowie.)

Clause 139, as amended, agreed to.

New Clause 8

Key definitions

“(1) This section applies for the purposes of this Chapter.

(2) ‘Carbon storage licence’ means a licence granted, or having effect as if granted, by the OGA under section 18(1) of the Energy Act 2008 (and references to a ‘licensee’ are to a person who holds such a licence).

(3) ‘Exploration operator’, in relation to a carbon storage licence, means a person who is responsible for organising or supervising—

(a) the carrying on of exploration, within the area within which activities are authorised under the licence, with a view to, or in connection with, the carrying on of activities within section 17(2)(a) or (b) of the Energy Act 2008, or

(b) the establishment or maintenance in a controlled place (as defined in section 17 of the Energy Act 2008) of an installation for the purposes of such exploration.

(4) ‘Carbon storage information’ means information acquired or created by or on behalf of a licensee in the course of carrying out activities under the licensee’s carbon storage licence.

(5) ‘Carbon storage samples’ means samples of substances acquired by or on behalf of a licensee in the course of carrying out activities under the licensee’s carbon storage licence.

(6) ‘Sanctionable requirement’ means a requirement imposed on a person by or under a provision of this Chapter which, by virtue of the provision, is sanctionable in accordance with this Chapter.—(Andrew Bowie.)

NC8 to NC28 and NS1 and NS2 make provision about carbon storage information and samples, and the powers of the OGA, corresponding to the provision made by Chapters 3, 5 and 6 of Part 2 of the Energy Act 2016 in respect of offshore petroleum. They are intended to form new Chapter 4A in Part 2. This new clause defines key terms for the purposes of the intended new Chapter.

Brought up, and read the First time.

[Andrew Bowie]

I beg to move, That the clause be read a Second time.

[The Chair]

With this it will be convenient to discuss the following:

Government new clause 9—Retention of information and samples.

Government new clause 10—Preparation and agreement of information and samples plans.

Government new clause 11—Information and samples plans: supplementary.

Government new clause 12—Information and samples coordinators.

Government new clause 13—Power of OGA to require information and samples.

Government new clause 14—Prohibition on disclosure of information or samples by OGA.

Government new clause 15—Power of Secretary of State to require information and samples.

Government new clause 16—Power of OGA to give sanction notices.

Government new clause 17—Enforcement notices.

Government new clause 18—Financial penalty notices.

Government new clause 19—Revocation notices.

Government new clause 20—Operator removal notices.

Government new clause 21—Duty of OGA to give sanction warning notices.

Government new clause 22—Publication of details of sanctions.

Government new clause 23—Subsequent sanction notices.

Government new clause 24—Withdrawal of sanction notices.

Government new clause 25—Sanctions: information powers.

Government new clause 26—Appeals in connection with Chapter.

Government new clause 27—Procedure for enforcement decisions.

Government new clause 28—Interpretation of Chapter.

Government new schedule 1—Permitted disclosures of material obtained by OGA.

Government new schedule 2—Carbon storage information and samples: appeals.

[Andrew Bowie]

New clause 8 provides the key definitions for the purposes of this new chapter, enabling the effective understanding of all carbon storage information and samples provisions. The powers provided by this chapter specifically support the Oil and Gas Authority, the business name of which is the North Sea Transition Authority, in its role as a regulator of carbon storage.

New clause 9 provides the Secretary of State with the power to make regulations on the retention of information and samples acquired by carbon storage licensees acting under the authority of the NSTA. The provisions will align carbon storage information requirements with existing petroleum licensing provisions, as established in the Energy Act 2016.

The specific type of information and samples that licensees will be required to retain will be set out in regulations. That will be alongside the form and manner in which they are to be retained, the period of retention and the events that trigger the commencement of such requirements. The various exploration, appraisal and monitoring activities that will be carried out on and under the seabed by carbon storage licence holders will yield important information, supporting the NSTA to carry out its regulatory functions.

New clauses 10 and 11 establish requirements for the preparation and agreement of information and samples plans. These are agreements between the NSTA and a carbon storage licence holder that set out what should happen to carbon storage information and samples held by the licence holder before the occurrence of certain carbon storage licence events. Provisions involving information and samples plans were introduced for petroleum licences in the Energy Act 2016. We therefore expect them to provide the same benefits for carbon storage licence events.

New clause 12 establishes provisions for the designation of information and samples co-ordinators, which will monitor compliance with obligations imposed under the new chapter, uphold the requirements of any information and samples plans, and help to protect against the risks of data loss during a licence event. Information and samples co-ordinators are expected to prove a valuable aid in respect of data reporting compliance. That is evident in the instrumental role they currently play in relation to petroleum licensees under the Energy Act 2016.

New clause 13 establishes powers for the NSTA to obtain information and samples collected through carbon storage activities to support its regulatory functions. This includes information and samples held by persons in accordance with regulations made under new clauses 9 and 10.

New clause 14 prohibits the NSTA from disclosing any information and samples it holds in accordance with the powers in this chapter, subject to the provisions of new schedule 1 and the power of the Secretary of State to obtain information from the NSTA in new clause 15. This will provide carbon storage licensees with the reassurance that any information and samples provided to the NSTA in support of their regulatory functions will not be allowed to be disclosed, except in specified circumstances.

New schedule 1 sets out the circumstances in which, to whom, and for what purposes the NSTA can disclose information. This includes providing for disclosure in accordance with regulations made by the Secretary of State that may permit protected material to be published, or made available to the public, after a specified period. The public disclosure of this information after a suitable period of confidentiality will support effective regulation by the NSTA.

New clause 15 provides powers to the Secretary of State to require information and samples held by, or on behalf of, the NSTA. It will align powers for carbon storage information and samples with the equivalent powers established for petroleum information and samples under the Energy Act 2016. This power will be used to enable the Secretary of State to carry out statutory functions, to monitor the performance of the NSTA, or to provide information for the purposes of parliamentary proceedings. Carbon storage licences return to the Government once storage sites have been closed for a designated period, and the Government are liable for any potential future leakage.

I turn now to new clauses 16 to 25. New clause 16 provides the NSTA with powers to issue sanction notices to persons who fail to comply with the requirements imposed on them under this chapter of the Bill. Such sanction notices can be in the form of an enforcement, a financial penalty, a revocation or operator removal notices. New clauses 17 to 20 make the necessary provisions for each of those types of notice. Importantly, new clause 21 places a requirement on the NSTA to issue a sanction warning notice ahead of any sanction notice that it proposes to issue under the powers established in new clause 16.

New clause 22 establishes that the NSTA may publish details of any sanction notices issued under new clause 16, including details of any sanction notice that is cancelled or withdrawn. New clause 22 also provides that the NSTA may not publish information that it considers to be commercially sensitive, not in the public interest or otherwise inappropriate to publish. New clause 23 places a restriction on the NSTA issuing more than one sanction notice in respect of the same contravention. New clause 24 provides the NSTA with the power to withdraw any sanction notices issued. Finally, new clause 25 enables the NSTA to require specified documents or information to support an investigation into whether a sanction notice ought to be provided under new clause 16.

New clause 26 introduces new schedule 2 to the Bill. Alongside new schedule 22, new clause 26 provides for an appeal to be made to the first-tier tribunal against any decision made by the NSTA. This is in relation to the NSTA exercising its new power to require carbon storage information samples. As I am sure Committee members will agree, the right of appeal for licence holders is a necessary and important part of conferring new regulatory powers on the NSTA.

New clause 27 will require the NSTA to determine and publish the procedure it proposes to follow in its decision making when issuing a sanction notice under new clause 16, which ensures public transparency in how the NSTA will enforce the sanctionable requirements and provides clarity for licence holders in respect of the NSTA’s procedures.

Finally, new clause 28 provides definitions to aid the interpretation of the provisions relating to carbon storage information samples detailed in this chapter. The definitions cross-reference the relevant existing legislation where appropriate.

[Dr Whitehead]

This group consists primarily of new clauses that the Government introduced. A substantial number of new clauses relate to the very sensible business of securing samples and various other things that can be of use in the regulation of the process and quality control, and in various other things relating to carbon capture and storage activity. So far, so good. These are certainly sensible clauses that establish arrangements for disputes and various other things, such as sanctions for when samples are not properly provided and so on—all good stuff.

However, there is an important point about the collection and retention of samples, as set out in the factsheet, which was subsequently published, that the Minister kindly provided me with when he said he intended to produce these new clauses. By the way, the factsheet refers to the NSTA, but the legislation refers to the OGA—again, maybe that is something we can discuss later. The Government say:

“We are legislating to provide the NSTA with appropriate powers to require carbon storage licensees to retain and report information and samples gathered as part of activities associated with the geological storage of carbon dioxide, and to enable the NSTA to publicly disclose this information after a suitable confidentiality period.”

I understand and appreciate the need for a suitable confidentiality period, but it is really important that the samples and data collections are available publicly for the greater benefit of the sector as a whole, in terms of its future development of carbon capture and storage. Government new clause 14 has a fairly fierce title: “Prohibition on disclosure of information or samples by OGA”. It effectively prohibits disclosure except under slightly unclear circumstances set out in new schedule 1, which states that the material may nevertheless be published and put into the public domain, but there is no real definition of how that may be done.

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There is also, in the new schedule, the issue of consent and agreement to the release of samples by the people who gave the samples to the OGA. There is no definition, as far as I can see, of unreasonably withholding consent. Conceivably, a company could provide samples that are subject to a confidentiality period but then state, “We will not give our consent to publication for a while.” The Minister’s powers to override that are rather uncertain. I am not really clear about how the procedure can best ensure publication, as the factsheet says it should, and how it will work towards the speedy development of carbon capture and storage.

[Andrew Bowie]

As ever, I do not have all the information the hon. Gentleman is asking for at my fingertips, but I am happy to write to him with more detail on exactly how we will proceed.

On information samples being stored, and how they are publicly disclosed, as in the petroleum industry, the reporting of information to the North Sea Transition Authority will allow it to be securely stored in the NSTA controlled online data systems, such as the national data repository, or as open data in the NSTA data centre, which are both accessible via any internet browser.

Information in the national data repository becomes publicly accessible, online, upon disclosure. All information in the NSTA open data centre is disclosed information and is publicly accessible online. Reported samples are held by the British Geological Survey on behalf of NSTA. Disclosed geological samples are physically accessible by the public at the British Geological Survey geological sample storage facility in Nottinghamshire.

The hon. Gentleman asks why we are not fully changing the name of the OGA to the NSTA. We understand that the name change is important. We are considering legislative options for amending the statutory name of the Oil and Gas Authority. However, as was outlined in the other place, if we legislatively changed the OGA’s name to the NSTA, we would need to address all the instances in which the OGA is mentioned in primary and secondary legislation, and any partial name change could undermine or change the North Sea Transition Authority’s statutory functions, powers and objectives. I promise that I will write to the hon. Gentleman will more information on the other points he raised.

Question put and agreed to.

New clause 8 accordingly read a Second time, and added to the Bill.

New Clause 9

Retention of information and samples

“(1) Regulations made by the Secretary of State may require—

(a) specified licensees to retain specified carbon storage information;

(b) specified licensees to retain specified carbon storage samples.

(2) ‘Specified’ means specified, or of a description specified, in regulations under this section.

(3) Regulations under this section may include provision about—

(a) the form or manner in which information or samples are to be retained;

(b) the period for which information or samples are to be retained;

(c) the event that triggers the commencement of that period.

(4) Regulations under this section may provide for requirements imposed by the regulations to continue following a termination of rights under the licensee’s carbon storage licence (whether by transfer, surrender, expiry or revocation and whether in relation to all or only part of the licence).

(5) Regulations under this section may not impose requirements which have effect in relation to particular carbon storage information or particular carbon storage samples at any time when an information and samples plan dealing with the information or samples has effect.

(6) Requirements imposed by regulations under this section are sanctionable in accordance with this Chapter.

(7) Before making regulations under this section, the Secretary of State must consult each licensing authority that may under section 18(1) of the Energy Act 2008 grant a licence in respect of the carrying on, in a place to which the regulations would apply, of activities within section 17(2) of that Act.

(8) Regulations under this section are subject to the negative procedure.”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), enables the Secretary of State to make regulations about the retention of information acquired or created, or samples acquired, by or on behalf of the holder of a carbon storage licence.

Brought up, read the First and Second time, and added to the Bill.

New Clause 10

Preparation and agreement of information and samples plans

“(1) The responsible person must prepare an information and samples plan in connection with any of the following (each ‘a licence event’)—

(a) where a licensee is a company, a change in control of the company within the meaning of paragraph 6 of Schedule 1 to the Carbon Dioxide (Licensing etc.) Regulations 2010 (S.I. 2010/2221) (inserted by Schedule 6 to this Act);

(b) a change in the identity of—

(i) the exploration operator under a carbon storage licence, or

(ii) where a storage permit has been granted under a carbon storage licence, the operator in relation to the storage permit (within the meaning of regulation 1(3) of the Carbon Dioxide (Licensing etc.) Regulations 2010);

(c) a transfer of rights under a carbon storage licence, whether in relation to all or part of the area in respect of which the licence was granted;

(d) a surrender of rights under a carbon storage licence in relation to all of the area in respect of which the licence was granted, or in relation to so much of that area in respect of which the licence continues to have effect;

(e) the expiry of a carbon storage licence;

(f) the termination of a carbon storage licence;

(g) the revocation of a storage permit.

(2) ‘Responsible person’, in relation to a licence event, means the person who is or was, or the persons who are or were, the licensee in respect of the relevant licence immediately before the licence event.

(3) ‘Relevant licence’, in relation to a licence event, means the carbon storage licence in respect of which the licence event occurs.

(4) ‘Information and samples plan’, in relation to a licence event, means a plan dealing with what is to happen, following the event, to—

(a) carbon storage information held by the responsible person before the event, and

(b) carbon storage samples held by that person before the event.

(5) The responsible person must agree the information and samples plan with the OGA—

(a) in the case of a licence event mentioned in subsection (1)(a), (b), (c), (d) or (e), before the licence event takes place, or

(b) in the case of a licence event mentioned in subsection (1)(f) or (g), within a reasonable period after the termination of the carbon storage licence or revocation of the storage permit.

(6) An information and samples plan has effect once it is agreed with the OGA.

(7) If an information and samples plan is not agreed with the OGA as mentioned in subsection (5)(a) or (b), the OGA—

(a) may itself prepare an information and samples plan in connection with the licence event, and

(b) may require the responsible person to provide it with such information as the OGA may require to enable it to do so.

(8) The OGA must inform the responsible person of the terms of any information and samples plan it prepares in connection with a licence event.

(9) Where the OGA—

(a) prepares an information and samples plan in connection with a licence event, and

(b) informs the responsible person of the terms of the plan,

the plan has effect as if it had been prepared by the responsible person and agreed with the OGA.

(10) Where an information and samples plan has effect in connection with a licence event, the responsible person must comply with the plan.

(11) The requirements imposed by subsection (5) and (10), or under subsection (7)(b), are sanctionable in accordance with this Chapter.”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the preparation and agreement of plans dealing with what is to happen to carbon storage information and samples following certain events.

Brought up, read the First and Second time, and added to the Bill.

New Clause 11

Information and samples plans: supplementary

“(1) Where an information and samples plan has effect in relation to a licence event, the OGA and the responsible person may agree changes to the plan.

(2) Once changes are agreed, the plan has effect subject to those changes.

(3) Where—

(a) two or more persons are the responsible person in relation to a licence event, and

(b) those persons include a company that has, since the licence event, been dissolved,

the reference to the responsible person in subsection (1) does not include that company.

(4) An information and samples plan, in relation to a licence event, may provide as appropriate for—

(a) the retention, by the responsible person, of any carbon storage information or carbon storage samples held by or on behalf of that person before the licence event,

(b) the transfer of any such information or samples to a new licensee, or

(c) appropriate storage of such information or samples.

(5) Where an information and samples plan makes provision under subsection (4) for a person, other than the responsible person, to hold information or samples in accordance with the plan—

(a) the plan may, with the consent of that other person, impose requirements on that person in connection with the information and samples, and

(b) any such requirements are sanctionable in accordance with this Chapter.

(6) An information and samples plan prepared by the OGA under section (Preparation and agreement of information and samples plans) may not include provision under subsection (4)(b) for the transfer of information or samples to another person without the consent of the responsible person.

(7) An information and samples plan may provide for the storage of information or samples as mentioned in subsection (4)(c) to be the responsibility of the OGA.

(8) Where a transfer of rights under a carbon storage licence relates to only part of the area in relation to which the licence was granted, the information and samples plan prepared in connection with the transfer is to relate to all carbon storage information and carbon storage samples held by the responsible person before the licence event, and not only information and samples in respect of that part of the area.

(9) In this section, ‘licence event’ and ‘responsible person’ have the same meaning as in section (Preparation and agreement of information and samples plans).”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision supplementing the provision about information and samples plans made by NC10.

Brought up, read the First and Second time, and added to the Bill.

New Clause 12

Information and samples coordinators

“(1) A person within subsection (2) (a ‘relevant person’) must—

(a) appoint an individual to act as an information and samples coordinator, and

(b) notify the OGA of that individual’s name and contact details.

(2) The following persons are within this subsection—

(a) a licensee, and

(b) an exploration operator under a carbon storage licence.

(3) The information and samples coordinator is to be responsible for monitoring the relevant person’s compliance with its obligations under this Chapter.

(4) A relevant person must comply with subsection (1) within a reasonable period after—

(a) the date on which this section comes into force, if the person is a relevant person on that date, or

(b) becoming a relevant person, in any other case.

(5) The relevant person must notify the OGA of any change in the identity or contact details of the information and samples coordinator within a reasonable period of the change taking place.

(6) The requirements imposed by this section are sanctionable in accordance with this Chapter.”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision requiring licensees and exploration operators to appoint an individual (an information and samples coordinator) to be responsible for monitoring their compliance with obligations imposed by or under the intended new Chapter.

Brought up, read the First and Second time, and added to the Bill.

New Clause 13

Power of OGA to require information and samples

“(1) The OGA may by notice in writing, for the purpose of carrying out any of its functions under Chapter 3 of Part 1 of the Energy Act 2008 (storage of carbon dioxide), require—

(a) a licensee to provide it with any carbon storage information, or a portion of any carbon storage sample, held by or on behalf of the licensee;

(b) a person who holds information or samples in accordance with an information and samples plan to provide it with any such information or a portion of any such sample.

(2) The notice must specify—

(a) the form or manner in which the information or the portion of a sample must be provided;

(b) the time at which, or period within which, the information or the portion of a sample must be provided.

(3) Information requested under subsection (1) may not include items subject to legal privilege.

(4) Requirements imposed by a notice under this section are sanctionable in accordance with this Chapter.

(5) Where a person provides information or a portion of a sample to the OGA in accordance with a notice under this section, any requirements imposed on the person in respect of that information or sample by regulations under section (Retention of information and samples) are unaffected.”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the power of the OGA to require licensees and certain other persons to provide it with any carbon storage information or samples they hold (or that are held on their behalf).

Brought up, read the First and Second time, and added to the Bill.

New Clause 14

Prohibition on disclosure of information or samples by OGA

“(1) Protected material must not be disclosed—

(a) by the OGA, or

(b) by a subsequent holder,

except in accordance with section (Power of Secretary of State to require information and samples) or Schedule (Permitted disclosures of material obtained by OGA).

(2) In this section and in Schedule (Permitted disclosures of material obtained by OGA)—

‘protected material’ means information or samples which have been obtained by the OGA under section (Power of OGA to require information and samples) or (Sanctions: information powers);

‘subsequent holder’, in relation to protected material, means a person holding protected material who has received it directly or indirectly from the OGA by virtue of a disclosure, or disclosures, in accordance with Schedule (Permitted disclosures of material obtained by OGA).

(3) References to disclosing protected material include references to making the protected material available to other persons (where the protected material includes samples).”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision prohibiting the disclosure by the OGA of information and samples obtained under NC13 except in accordance with NS1 or with a requirement imposed by the Secretary of State under NC15.

Brought up, read the First and Second time, and added to the Bill.

New Clause 15

Power of Secretary of State to require information and samples

“(1) The Secretary of State may require the OGA to provide the Secretary of State with such information or samples held by or on behalf of the OGA as the Secretary of State may require for the purpose of—

(a) carrying out any function conferred by or under any Act,

(b) monitoring the OGA’s performance of its functions, or

(c) any Parliamentary proceedings.

(2) The Secretary of State may use information or samples acquired under subsection (1) (‘acquired material’) only for the purpose for which it is provided.

(3) Acquired material must not be disclosed—

(a) by the Secretary of State, or

(b) by a subsequent holder,

except in accordance with this section.

(4) For the purposes of subsection (3)(b), ‘subsequent holder’, in relation to acquired material, means a person who receives acquired material directly or indirectly from the Secretary of State by virtue of a disclosure, or disclosures, in accordance with this section.

(5) Subsection (3) does not prohibit the Secretary of State from disclosing acquired material so far as necessary for the purpose for which it was provided.

(6) Subsection (3) does not prohibit a disclosure of acquired material if—

(a) the disclosure is required by virtue of an obligation imposed by or under any Act, or

(b) the OGA consents to the disclosure and, where the acquired material in question was provided to the OGA by or on behalf of another person, confirms that that person also consents to the disclosure.

(7) References in this section to disclosing acquired material include references to making the acquired material available to other persons (where the acquired material includes samples).”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision, corresponding to the provision made by section 11 of the Energy Act 2016, about the power of the Secretary of State to require the provision of carbon storage information or samples held by or on behalf of the OGA.

Brought up, read the First and Second time, and added to the Bill.

New Clause 16

Power of OGA to give sanction notices

“(1) If the OGA considers that a person has failed to comply with a sanctionable requirement imposed on the person, it may give the person a sanction notice in respect of that failure.

(2) If the OGA considers that there has a been a failure to comply with a sanctionable requirement imposed jointly on two or more persons, it may give a sanction notice in respect of that failure—

(a) to one only of those persons (subject to section (Revocation notices)(2)),

(b) jointly to two or more of them, or

(c) jointly to all of them,

but it may not give separate sanction notices to each of them in respect of the failure.

(3) In this Chapter ‘sanction notice’ means—

(a) an enforcement notice (see section (Enforcement notices)),

(b) a financial penalty notice (see section (Financial penalty notices)),

(c) a revocation notice (see section (Revocation notices)), or

(d) an operator removal notice (see section (Operator removal notices)).

(4) Sanction notices, other than enforcement notices, may be given in respect of a failure to comply with a sanctionable requirement even if, at the time the notice is given, the failure to comply has already been remedied.

(5) Where the OGA gives a sanction notice to a person in respect of a particular failure to comply with a sanctionable requirement—

(a) it may, at the same time, give another type of sanction notice to the person in respect of that failure to comply;

(b) it may give subsequent sanction notices in respect of that failure only in accordance with section (Subsequent sanction notices) (subsequent sanction notices).

(6) The OGA’s power to give sanction notices under this section is subject to section (Duty of OGA to give sanction warning notices) (duty of OGA to give sanction warning notices).

(7) Where the OGA gives a sanction notice to a licensee in respect of a failure to comply with a sanctionable requirement—

(a) the matter is to be dealt with in accordance with this Chapter, and

(b) any requirement under the licensee’s carbon storage licence to deal with the matter in a certain way (including by arbitration) does not apply in respect of that failure to comply.”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the power of the OGA to give sanction notices to persons who have failed to comply with requirements imposed on them by or under the intended new Chapter.

Brought up, read the First and Second time, and added to the Bill.

New Clause 17

Enforcement notices

“(1) An enforcement notice is a notice which—

(a) specifies the sanctionable requirement in question,

(b) gives details of the failure to comply with the requirement, and

(c) informs the person or persons to whom the notice is given that the person or persons must comply with—

(i) the sanctionable requirement, and

(ii) any directions included in the notice as mentioned in subsection (2),

before the end of the period specified in the notice.

(2) The notice may include directions as to the measures to be taken for the purposes of compliance with the sanctionable requirement.

(3) Requirements imposed by directions included in an enforcement notice as mentioned in subsection (2) are sanctionable in accordance with this Chapter.”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about enforcement notices (notices requiring a person to take measures for the purposes of complying with a requirement imposed by or under the new Chapter), which may be given by the OGA under NC16.

Brought up, read the First and Second time, and added to the Bill.

New Clause 18

Financial penalty notices

“(1) A financial penalty notice is a notice which—

(a) specifies the sanctionable requirement in question,

(b) gives details of the failure to comply with the requirement, and

(c) informs the person or persons to whom the notice is given that the person or persons must—

(i) comply with the sanctionable requirement before the end of a period specified in the notice, where it is appropriate to require such compliance and the failure to comply with the requirement has not already been remedied at the time the notice is given, and

(ii) pay the OGA a financial penalty of the amount specified in the notice before the end of a period specified in the notice.

(2) The period specified under subsection (1)(c)(ii) must not end earlier than the end of the period of 28 days beginning with the day on which the financial penalty notice is given.

(3) The financial penalty payable under a financial penalty notice in respect of a failure to comply with a sanctionable requirement (whether payable by one person, or jointly by two or more persons) must not exceed £1 million.

(4) If a financial penalty notice is given jointly to two or more persons, those persons are jointly and severally liable to pay the financial penalty under it.

(5) A financial penalty payable under a financial penalty notice is to be recoverable as a civil debt if it is not paid before the end of the period specified under subsection (1)(c)(ii).

(6) The OGA must—

(a) issue guidance as to the matters to which it will have regard when determining the amount of the financial penalty to be imposed by a financial penalty notice, and

(b) have regard to the guidance when determining the amount of the penalty in any particular case.

(7) The OGA may from time to time review guidance issued under subsection (6)(a) and, if it considers appropriate, revise it.

(8) Before issuing or revising guidance under this section, the OGA must consult such persons as it considers appropriate.

(9) The OGA must—

(a) lay any guidance issued under this section, and any revision of it, before each House of Parliament;

(b) publish any guidance issued under this section, and any revision of it, in such manner as the OGA considers appropriate.

(10) The Secretary of State may by regulations subject to the affirmative procedure amend subsection (3) to change the amount specified to an amount not exceeding £5 million.

(11) Money received by the OGA under a financial penalty notice must be paid into the Consolidated Fund.”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about financial penalty notices (notices requiring a person to pay a financial penalty for failure to comply with a requirement imposed by or under the intended new Chapter), which may be given by the OGA under NC16.

Brought up, read the First and Second time, and added to the Bill.

New Clause 19

Revocation notices

“(1) A revocation notice may be given only in respect of a failure to comply with a sanctionable requirement imposed on a licensee in that capacity.

(2) Where two or more persons are the licensee in respect of a carbon storage licence, the revocation notice must be given jointly to all of those persons.

(3) A revocation notice is a notice which—

(a) specifies the sanctionable requirement in question,

(b) gives details of the failure to comply with the requirement,

(c) informs the person or persons to whom the notice is given that—

(i) where no storage permit has been granted under the carbon storage licence, the licence is to be terminated, or

(ii) where a storage permit has been granted under the carbon storage licence, the permit is to be revoked,

on the date specified in the notice (‘the revocation date’).

(4) The revocation date must not be earlier than the end of the period of 28 days beginning with the day on which the revocation notice is given.

(5) A revocation notice may not be given in circumstances where the carbon storage licence to be terminated, or the storage permit to be revoked, in accordance with the notice is one which, on the date the notice is given, the OGA would not have the power to grant.

(6) Where a carbon storage licence is terminated in accordance with a revocation notice—

(a) the rights granted to the licensee by the licence cease on the revocation date;

(b) the revocation does not affect any obligation or liability imposed on or incurred by the licensee under the terms and conditions of the licence;

(c) the terms and conditions of the licence apply as if the licence had been terminated in accordance with those terms and conditions, subject to section (Power of OGA to give sanction notices)(7)(b).

(7) Where a storage permit is revoked in accordance with a revocation notice—

(a) the authorisation granted by the storage permit ceases on the revocation date;

(b) the revocation does not affect any obligation or liability imposed or incurred under the terms and conditions of the storage permit;

(c) the terms and conditions of the carbon storage licence apply as if the storage permit had been revoked in accordance with those terms and conditions, subject to section (Power of OGA to give sanction notices)(7)(b).” —(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about revocation notices (notices terminating a carbon storage licence, or a storage permit, where a licensee has failed to comply with a requirement imposed by or under the intended new Chapter), which may be given by the OGA under NC16.

Brought up, read the First and Second time, and added to the Bill.

New Clause 20

Operator removal notices

“(1) An operator removal notice may be given only in respect of a failure to comply with a sanctionable requirement imposed on an exploration operator under a carbon storage licence in that capacity.

(2) An operator removal notice is a notice which—

(a) specifies the sanctionable requirement,

(b) gives details of the failure to comply with the requirement, and

(c) informs the exploration operator to whom it is given that, with effect from a date specified in the notice (‘the removal date’), the licensee under whose carbon storage licence the exploration operator operates (‘the relevant licensee’) is to be required to remove the exploration operator (see subsection (4)).

(3) The OGA must—

(a) give a copy of the operator removal notice to the relevant licensee, and

(b) require the relevant licensee to remove the exploration operator with effect from the removal date.

(4) Where a licensee is required to remove an exploration operator from a specified date, the licensee must ensure that, with effect from that date, the exploration operator does not exercise any function of organising or supervising any of the activities referred to in paragraphs (a) and (b) of section (Key definitions)(3).

(5) The removal date must not be earlier than the end of the period of 28 days beginning with the day on which the operator removal notice is given.

(6) An operator removal notice may not be given in circumstances where the carbon storage licence under which the exploration operator operates is one which, on the date the notice is given, the OGA would not have the power to grant.

(7) A requirement imposed on a licensee under subsection (3)(b) is sanctionable in accordance with this Chapter.” —(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about operator removal notices (notices requiring a licensee to remove an exploration operator who has failed to comply with a requirement imposed by or under the intended new Chapter), which may be given by the OGA under NC16.

Brought up, read the First and Second time, and added to the Bill.

New Clause 21

Duty of OGA to give sanction warning notices

“(1) This section applies where the OGA proposes to give a sanction notice in respect of a failure to comply with a sanctionable requirement.

(2) The OGA must give a sanction warning notice in respect of the sanctionable requirement to—

(a) the person or persons to whom it proposes to give a sanction notice, and

(b) where it proposes to give an operator removal notice, the relevant licensee (see section (Operator removal notices)(2)(c)).

(3) A sanction warning notice, in respect of a sanctionable requirement, is a notice which—

(a) specifies the sanctionable requirement,

(b) informs the person or persons to whom it is given that the OGA proposes to give a sanction notice in respect of a failure to comply with the requirement,

(c) gives details of the failure to comply with the sanctionable requirement, and

(d) informs the person or persons to whom it is given that the person or persons may, within the period specified in the notice (‘the representations period’), make representations to the OGA in relation to the matters dealt with in the notice.

(4) The representations period must be such period as the OGA considers appropriate in the circumstances.

(5) Subsections (6) and (7) apply where the OGA gives a sanction warning notice to a person or persons in respect of a sanctionable requirement.

(6) The OGA must not give a sanction notice to the person or persons in respect of a failure to comply with the requirement until after the end of the representations period specified in the sanction warning notice.

(7) Having regard to representations made during the representations period specified in the sanction warning notice, the OGA may decide—

(a) to give the person or persons a sanction notice in respect of the failure to comply with the requirement detailed in the sanction warning notice under subsection (3)(c),

(b) to give the person or persons a sanction notice in respect of a failure to comply with the requirement which differs from the failure detailed in the sanction warning notice under subsection (3)(c), or

(c) not to give the person or persons a sanction notice in respect of a failure to comply with the requirement.” —(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the duty of the OGA to give a sanction warning notice where it proposes to give a sanction notice under NC16.

Brought up, read the First and Second time, and added to the Bill.

New Clause 22

Publication of details of sanctions

“(1) The OGA may publish details of any sanction notice given in accordance with this Chapter.

(2) But the OGA may not publish anything that, in its opinion—

(a) is commercially sensitive,

(b) is not in the public interest to publish, or

(c) is otherwise not appropriate for publication.

(3) If, after details of a sanction notice are published by the OGA, the sanction notice is—

(a) cancelled on appeal, or

(b) withdrawn under section (Withdrawal of sanction notices),

the OGA must publish details of the cancellation or withdrawal.” —(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the publication by the OGA of details of sanctions notices given under NC16.

Brought up, read the First and Second time, and added to the Bill.

New Clause 23

Subsequent sanction notices

“(1) This section applies where the OGA gives a sanction notice in respect of a particular failure to comply with a sanctionable requirement (whether the notice is given alone or at the same time as another type of sanction notice).

(2) If the sanction notice given is a revocation notice or an operator removal notice, no further sanction notices may be given in respect of the failure to comply.

(3) If the sanction notice given is a financial penalty notice which does not require compliance with the sanctionable requirement, no further sanction notices may be given in respect of the failure to comply.

(4) Subsection (5) applies if the sanction notice given is—

(a) an enforcement notice, or

(b) a financial penalty notice which requires compliance with the sanctionable requirement.

(5) No further sanction notices may be given in respect of the failure to comply before the end of the period specified under section (Enforcement notices)(1)(c) or (Financial penalty notices)(1)(c)(i), as the case may be (period for compliance with sanctionable requirement).”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision restricting the power of the OGA under NC16 to give more than one sanction notice in respect of the same failure.

Brought up, read the First and Second time, and added to the Bill.

New Clause 24

Withdrawal of sanction notices

“(1) The OGA may, at any time after giving a sanction notice, withdraw the sanction notice.

(2) If a sanction notice is withdrawn by the OGA—

(a) the notice ceases to have effect, and

(b) the OGA must notify the following persons of the withdrawal of the notice—

(i) the person or persons to whom the notice was given;

(ii) in the case of an operator removal notice, the licensee under whose carbon storage licence the exploration operator operates.”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the withdrawal of sanction notices given by the OGA under NC16.

Brought up, read the First and Second time, and added to the Bill.

New Clause 25

Sanctions: information powers

“(1) This section applies for the purposes of an investigation which—

(a) concerns whether a person has failed to comply with a sanctionable requirement, and

(b) is carried out by the OGA for the purpose of enabling it to decide whether to give the person a sanction notice, or on what terms a sanction notice should be given to the person.

(2) The OGA may by notice in writing, for the purposes of that investigation, require the person to provide specified documents or other information.

(3) ‘Specified’ means specified, or of a description specified, in a notice under this section.

(4) A requirement under subsection (2) applies only to the extent—

(a) that the documents requested are documents in the person’s possession or control, or

(b) that the information requested is information in the person’s possession or control.

(5) A requirement imposed by a notice under subsection (2) is sanctionable in accordance with this Chapter.

(6) The documents or information requested—

(a) may include documents or information held in any form (including in electronic form);

(b) may include documents or information that may be regarded as commercially sensitive;

(c) may not include items that are subject to legal privilege.

(7) The notice must specify—

(a) to whom the information is to be provided;

(b) where it is to be provided;

(c) when it is to be provided;

(d) the form and manner in which it is to be provided.”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the power of the OGA to require the provision of information for the purposes of an investigation carried out to enable it to decide whether to give a person a sanction notice under NC16.

Brought up, read the First and Second time, and added to the Bill.

New Clause 26

Appeals in connection with Chapter

“In Schedule (Carbon storage information and samples: appeals)—

(a) Part 1 contains provision about appeals against decisions by the OGA relating to the preparation of an information and samples plan and appeals against the giving of a notice under section (Power of OGA to require information and samples), and

(b) Part 2 contains provision about appeals against the imposition of sanction notices and appeals against the giving of a notice under section (Sanctions: information powers).”—(Andrew Bowie.)

This new clause introduces NS2, which contains provision about appeals in connection with the new Chapter intended to be formed by NC8 to NC28 (see the explanatory statement for NC8).

Brought up, read the First and Second time, and added to the Bill.

New Clause 27

Procedure for enforcement decisions

“(1) The OGA—

(a) must determine the procedure that it proposes to follow in relation to enforcement decisions, and

(b) must issue a statement of its proposals.

(2) The procedure mentioned in subsection (1)(a) must be designed to secure, among other things, that an enforcement decision is taken—

(a) by a person falling within subsection (3), or

(b) by two or more persons, each of whom falls within subsection (3).

(3) A person falls within this subsection if the person was not directly involved in establishing the evidence on which the enforcement decision is based.

(4) The statement mentioned in subsection (1)(b) must be published in whatever way appears to the OGA to be best calculated to bring the statement to the attention of the public.

(5) When the OGA takes an enforcement decision, the OGA must follow its stated procedure.

(6) If the OGA changes its procedure in a material way, it must publish a revised statement.

(7) A failure of the OGA in a particular case to follow its procedure as set out in the latest published statement does not affect the validity of an enforcement decision taken in that case.

(8) But subsection (7) does not prevent the Tribunal from taking into account any such failure in considering an appeal under paragraph 4 or 5 of Schedule (Carbon storage information and samples: appeals) in relation to a sanction notice.

(9) In this section, ‘enforcement decision’ means—

(a) a decision to give a sanction notice in respect of a failure to comply with a sanctionable requirement, or

(b) a decision as to the details of the sanction to be imposed by the notice.”—(Andrew Bowie.)

This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the procedure for the taking of decisions by the OGA in relation to the giving of sanction notices under NC16.

Brought up, read the First and Second time, and added to the Bill.

New Clause 28

Interpretation of Chapter

“In this Chapter—

‘information and samples plan’ has the meaning given in section (Preparation and agreement of information and samples plans);

‘items subject to legal privilege’ —

(a) in England and Wales, has the same meaning as in the Police and Criminal Evidence Act 1984 (see section 10 of that Act);

(b) in Scotland, has the meaning given by section 412 of the Proceeds of Crime Act 2002;

(c) in Northern Ireland, has the same meaning as in the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (NI 12));

‘OGA’ means the Oil and Gas Authority;

‘protected material’ has the meaning given in section (Prohibition on disclosure of information or samples obtained by OGA);

‘sanction notice’ has the meaning given in section (Power of OGA to give sanction notices);

‘storage permit’ has the same meaning as in the Storage of Carbon Dioxide (Licensing etc) Regulations 2010 (S.I. 2010/2221) (see regulation 1(3) of those Regulations);

‘subsequent holder’ has the meaning given in section (Prohibition on disclosure of information or samples obtained by OGA);

‘Tribunal’ means the First-tier tribunal.”—(Andrew Bowie.)

This new clause makes provision about the interpretation of the new Chapter intended to be formed by NC8 to NC28 (including NS1 and NS2): see the explanatory statement for NC8.

Brought up, read the First and Second time, and added to the Bill.

New Clause 29

Designation of hydrogen transport counterparty

“(1) The Secretary of State may by notice given to a person designate the person to be a counterparty for hydrogen transport revenue support contracts.

(2) A ‘hydrogen transport revenue support contract’ is a contract to which a hydrogen transport counterparty is a party and which was entered into by a hydrogen transport counterparty in pursuance of a direction given to it under section (Direction to offer to contract with eligible hydrogen transport provider)(1).

(3) A person designated under subsection (1) is referred to in this Chapter as a ‘hydrogen transport counterparty’.

(4) A designation may be made only with the consent of the person designated (except where that person is the Secretary of State).

(5) The Secretary of State may exercise the power of designation so that more than one designation has effect under subsection (1), but only if the Secretary of State considers it necessary for the purposes of ensuring that—

(a) liabilities under a hydrogen transport revenue support contract are met,

(b) arrangements entered into for purposes connected to a hydrogen transport revenue support contract continue to operate, or

(c) directions given to a hydrogen transport counterparty continue to have effect.

(6) As soon as reasonably practicable after a designation ceases to have effect, the Secretary of State must make one or more transfer schemes under section 82 to ensure the transfer of all rights and liabilities under any hydrogen transport revenue support contract to which the person who has ceased to be a hydrogen transport counterparty was a party.

(7) In this Chapter ‘hydrogen transport provider’ means a person who carries on (or is to carry on) in the United Kingdom activities of transporting hydrogen.

(8) In subsection (7) the reference to carrying on activities in the United Kingdom includes carrying on activities in, above or below—

(a) the territorial sea adjacent to the United Kingdom;

(b) waters in a Renewable Energy Zone (within the meaning of Chapter 2 of Part 2 of the Energy Act 2004);

(c) waters in a Gas Importation and Storage Zone (within the meaning given by section 1 of the Energy Act 2008).

(9) In subsection (7) ‘transporting hydrogen’ includes transporting a compound, of which hydrogen is an element, which revenue support regulations specify as a qualifying compound for the purposes of this section.”—(Andrew Bowie.)

This new clause and NC30, NC31 and NC32 (which are intended to be inserted after clause 60) enable the Secretary of State to designate a counterparty and direct it to offer to contract with hydrogen transport providers or (as the case may be) with hydrogen storage providers.

Brought up, read the First and Second time, and added to the Bill.

New Clause 30

Direction to offer to contract with eligible hydrogen transport provider

“(1) The Secretary of State may, in accordance with any provision made by revenue support regulations, direct a hydrogen transport counterparty to offer to contract with an eligible hydrogen transport provider specified in the direction, on terms specified in the direction.

(2) Revenue support regulations may make further provision about a direction under this section and in particular about—

(a) the circumstances in which a direction may or must be given;

(b) the terms that may or must be specified in a direction.

(3) Provision falling within subsection (2) may include provision for calculations or determinations to be made under the regulations, including by such persons, in accordance with such procedure and by reference to such matters and to the opinion of such persons, as may be specified in the regulations.

(4) Revenue support regulations must make provision for determining the meaning of ‘eligible’ in relation to a hydrogen transport provider.”—(Andrew Bowie.)

See the explanatory statement for NC29.

Brought up, read the First and Second time, and added to the Bill.

New Clause 31

Designation of hydrogen storage counterparty

“(1) The Secretary of State may by notice given to a person designate the person to be a counterparty for hydrogen storage revenue support contracts.

(2) A ‘hydrogen storage revenue support contract’ is a contract to which a hydrogen storage counterparty is a party and which was entered into by a hydrogen storage counterparty in pursuance of a direction given to it under section (Direction to offer to contract with eligible hydrogen storage provider)(1).

(3) A person designated under subsection (1) is referred to in this Chapter as a ‘hydrogen storage counterparty’.

(4) A designation may be made only with the consent of the person designated (except where that person is the Secretary of State).

(5) The Secretary of State may exercise the power of designation so that more than one designation has effect under subsection (1), but only if the Secretary of State considers it necessary for the purposes of ensuring that—

(a) liabilities under a hydrogen storage revenue support contract are met,

(b) arrangements entered into for purposes connected to a hydrogen storage revenue support contract continue to operate, or

(c) directions given to a hydrogen storage counterparty continue to have effect.

(6) As soon as reasonably practicable after a designation ceases to have effect, the Secretary of State must make one or more transfer schemes under section 82 to ensure the transfer of all rights and liabilities under any hydrogen storage revenue support contract to which the person who has ceased to be a hydrogen storage counterparty was a party.

(7) In this Chapter ‘hydrogen storage provider’ means a person who carries on (or is to carry on) in the United Kingdom activities of storing hydrogen.

(8) In subsection (7) the reference to carrying on activities in the United Kingdom includes carrying on activities in, above or below—

(a) the territorial sea adjacent to the United Kingdom;

(b) waters in a Renewable Energy Zone (within the meaning of Chapter 2 of Part 2 of the Energy Act 2004);

(c) waters in a Gas Importation and Storage Zone (within the meaning given by section 1 of the Energy Act 2008).

(9) In subsection (7) ‘storing hydrogen’ includes storing a compound, of which hydrogen is an element, which revenue support regulations specify as a qualifying compound for the purposes of this section.’—(Andrew Bowie.)

See the explanatory statement for NC29.

Brought up, read the First and Second time, and added to the Bill.

New Clause 32

Direction to offer to contract with eligible hydrogen storage provider

“(1) The Secretary of State may, in accordance with any provision made by revenue support regulations, direct a hydrogen storage counterparty to offer to contract with an eligible hydrogen storage provider specified in the direction, on terms specified in the direction.

(2) Revenue support regulations may make further provision about a direction under this section and in particular about—

(a) the circumstances in which a direction may or must be given;

(b) the terms that may or must be specified in a direction.

(3) Provision falling within subsection (2) may include provision for calculations or determinations to be made under the regulations, including by such persons, in accordance with such procedure and by reference to such matters and to the opinion of such persons, as may be specified in the regulations.

(4) Revenue support regulations must make provision for determining the meaning of ‘eligible’ in relation to a hydrogen storage provider.”—(Andrew Bowie.)

See the explanatory statement for NC29.

Brought up, read the First and Second time, and added to the Bill.

New Clause 52

Principal objectives of Secretary of State and GEMA

“(1) Section 4AA of the Gas Act 1986 (principal objective and general duties of Secretary of State and GEMA) is amended as set out in subsections (2) and (3).

(2) In subsection (1A)(a), for ‘the reduction of gas-supply emissions of targeted greenhouse gases’ substitute ‘the Secretary of State’s compliance with the duties in sections 1 and 4(1)(b) of the Climate Change Act 2008 (net zero target for 2050 and five-year carbon budgets)’.

(3) In subsection (5B), omit the definitions of ‘emissions’, ‘gas-supply emissions’ and ‘targeted greenhouse gases’.

(4) Section 3A of the Electricity Act 1989 (principal objective and general duties of Secretary of State and GEMA) is amended as set out in subsections (5) and (6).

(5) In subsection (1A)(a), for ‘the reduction of electricity-supply emissions of targeted greenhouse gases’ substitute ‘the Secretary of State’s compliance with the duties in sections 1 and 4(1)(b) of the Climate Change Act 2008 (net zero target for 2050 and five-year carbon budgets)’.

(6) In subsection (5B), omit the definitions of ‘emissions’, ‘electricity-supply emissions’ and ‘targeted greenhouse gases’.”—(Andrew Bowie.)

This new clause is intended to replace clause 271. The intention is for it to appear at the start of Part 6. It is equivalent in substance to clause 271 but includes some drafting changes and consequential amendments.

Brought up, read the First and Second time, and added to the Bill.

Ordered, That further consideration be now adjourned. —(Joy Morrissey.)

Energy Security and Net Zero

Andrew Bowie Excerpts

Thursday 22nd June 2023 Ministerial Corrections

The following is an extract from the Tenth sitting of the Energy Public Bill Committee. 

[Andrew Bowie]

The clause contains a power for the Secretary of State to amend or modify the threshold for capacity in excess of which these measures can be applied. Capacity refers to the tonnage of oil that the operator has handled in the previous calendar year. This would not change the person to whom the powers under this part could apply.

[Official Report, Energy Public Bill Committee, 15 June 2023, Vol. 734, c. 299.]

Letter of correction from the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie).

An error has been identified in my response to the debate on clause 243.

The correct information should have been:

[Andrew Bowie]

The clause contains a power for the Secretary of State to amend or modify the threshold for capacity in excess of which these measures can be applied. Capacity refers to the tonnage of oil that the operator has handled in the previous calendar year. This would change the person to whom the powers under this part could apply.