Energy Bill [HL]

Baroness McIntosh of Pickering Excerpts

Committee stage
Monday 16th January 2023 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, I will also speak to Amendments 222ZB, 222ZC, 222ZD, 222ZE, 222ZF, 242I and 246A in my name. They will deliver on commitments we made in the British Energy Security Strategy to support the simplification of the offshore wind consenting process while continuing to protect our marine environment and meet our international conservation obligations.

The UK is a leader in offshore wind—we have the most installed capacity in Europe, as the Committee will be bored of hearing me say. Our ambition is shared across the devolved Administrations and we recognise the key role of Scottish projects in particular, as well as Welsh projects in the Celtic Sea. We will continue to work with the devolved Administrations as the Bill progresses through Parliament and as we develop subsequent secondary legislation to ensure a streamlined and efficient consenting process across the whole of the United Kingdom.

Amendment 222ZA sets out definitions for the subsequent clauses and Amendment 222ZB allows the use of strategic compensation measures to discharge obligations under the habitats regulations, the Marine and Coastal Access Act 2009 and the Scottish and Northern Irish equivalents. If all feasible options to avoid, reduce or mitigate any adverse impact on protected sites have been exhausted, the consenting authority may decide that an offshore wind project is in the public interest. However, it must first satisfy itself that sufficient compensatory measures are taken or secured before granting consent.

Identifying ecologically robust and securable compensatory measures in the marine environment frequently causes delays to project consent. To date, these measures have been delivered on a project-by-project basis. This is likely to become increasingly challenging. This amendment will enable earlier identification and agreement of suitable compensatory measures on a larger scale across multiple projects, which will help to support quicker decision-making on consents. Ministers in the devolved Administrations will retain their current roles in consenting. This amendment will ensure that they are also able to agree and secure strategic compensatory measures to satisfy compensation obligations for projects to which they consent.

Amendment 222ZC will enable the creation, operation and management of one or more marine recovery fund. The funds, once established, will be an optional mechanism for offshore wind developers to discharge a specified consenting condition that will help to compensate for damage to a protected site by paying into the fund. The Secretary of State will be able to delegate functions connected with the marine recovery fund. It is our intention to delegate the functions necessary for devolved Administrations to operate their own funds where appropriate, so that their Ministers may choose to use a marine recovery fund to undertake the delivery of measures related to projects to which they consent.

Amendment 222ZD will help to speed up the consenting process by streamlining assessments, including the habitats regulations assessment process. It will do this by enabling future regulations to address environmental protection of all protected marine sites early enough in the pre-application planning process to inform adequate and ecologically robust mitigation measures. This amendment also allows the Government to consider enabling developers to provide compensatory measures that improve wider marine ecosystems. I must emphasise that this broader approach would be considered only where developers have already avoided and mitigated their environmental impacts, and where like-for-like measures are not possible. Consent decisions will remain subject to advice from Defra’s statutory nature conservation bodies and their equivalents in the devolved Administrations.

Amendment 222ZE requires the Government and the devolved Administrations to consult each other, as well as statutory nature conservation bodies and marine regulatory bodies, on changes to the process prior to making regulations on environmental assessments.

In addition to Amendment 222ZA, Amendment 222ZF sets out some key definitions for the purposes of these new clauses. Amendment 242I ensures that the provision about affirmative procedures in the UK Parliament does not apply to regulations made by the Scottish Ministers under Amendment 222ZD, which will instead be subject to affirmative procedure in the Scottish Parliament. Amendment 246A sets out the commencement date of the clauses in this chapter. With that, I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, it would be churlish of me not to congratulate and thank my noble friend the Minister and the department on bringing forward the amendments to which he just referred. He promised these at Second Reading and they form part of a package, from April 2020, in the British energy security strategy. So far, so good. However, as I mentioned at Second Reading, in the EU Energy and Environment Sub-Committee some two or three years ago we took evidence to the effect that there should be a moratorium, particularly given the scale of the programme, the numbers involved and the massive area to be covered by offshore wind development; as my noble friend said, that is a very ambitious programme. However, the government amendments are flouting the mitigation hierarchy that I am sure he would wish to sign up to. The amendments seem to be proceeding to the end stage, which is only meant to be a last resort in law: that is, mitigation and compensation.

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[Lord Callanan (Con)]

My Lords, I thank all noble Lords for their contributions to this debate and the broad support for the government amendments. I congratulate the noble Baroness, Lady Worthington, on summarising quite well the dilemma that we all face in these matters: we can spend lots of time doing lots of very detailed environmental assessments and take everything into account, but the practical effect is that we continue with the existing power generation system that we know is damaging. I am not pretending that any of these issues is easy, but we think that we have provided a balance.

I start by providing reassurance that these amendments will not change the level of environmental protection, only the responsibility for delivering those actions, to ensure that they are implemented at the earliest opportunity and across a broader area than planned.

I thank my noble friend Lady McIntosh for her Amendments 242C and 242D on the impact of offshore wind farms on wildlife and marine habitats. On her first amendment, I reassure her that the Government already have in place rigorous environmental protection processes which each offshore wind development must undergo. These include a requirement for the Secretary of State to consult the relevant statutory nature conservation body and an examination of each application by an examining authority—in this case the Planning Inspectorate—which makes an independent recommendation to the Secretary of State. When developers submit their applications, they are required to provide information to enable the competent authority—in this case the Secretary of State—to undertake various assessments, including an environmental impact assessment and, where relevant, a marine conservation zone assessment and/or a habitats regulation assessment. These evaluate the impacts that the projects will have on the environment throughout their operational life cycle, from construction right through to eventual decommissioning.

Turning to Amendment 242D, I welcome my noble friend’s interest in our marine protected areas network. The current planning and legislative frameworks already ensure that offshore wind developments undergo rigorous scrutiny to identify impacts on marine protected areas, including the environmental assessments that I have just outlined. If at any stage of its life cycle the offshore wind farm would have impacts on protected sites and those impacts cannot be avoided, reduced or mitigated, but at the same time the project is considered to be in the public interest, then the Secretary of State, as the appropriate authority, has a duty to ensure that the necessary compensatory measures are put in place.

Defra is currently leading work with the offshore wind industry and other stakeholders to develop a library of ecologically robust and commercially feasible strategic compensation measures. Those compensation measures within the library will have had their effectiveness and feasibility tested before they are ever placed in that library. We also intend to introduce a set of offshore wind environmental standards for offshore wind farms, including a noise standard. The standards will apply across the industry and will, we hope, reduce the overall environmental impact of the sector.

It should not be automatically assumed that offshore wind developments will necessarily be harmful to marine protected areas. In many cases, such developments, as the noble Baroness, Lady Worthington said, may be compatible with the conservation objectives of the marine protected area in question. In any event, the Secretary of State cannot provide consent for an offshore wind development unless they are satisfied that the sequential legislative tests have been met.

[Baroness McIntosh of Pickering (Con)]

I understand that in Norway oil and gas firms are required to publish the environmental data that they hold. Would my noble friend see fit to ensure that the same happened here? What sort of environmental impact assessment is done before planning is given?

[Lord Callanan (Con)]

I have just outlined to my noble friend all the different assessments that are carried out before permission is given. The Planning Inspectorate makes a recommendation to the Secretary of State, and all those documents are published when relevant consents or others are given. If that is not the case, I will correct that for my noble friend, but as far as I am aware they are all published.

In respect of the comments that were made about the onshore grid, the amendments here apply only to the offshore elements of the wind farm development, which are the generation station itself and the offshore transmission. The building and the upgrade of the onshore network infrastructure—I am well aware that that is a very controversial subject in certain parts of the country, particularly East Anglia, at the moment—will always be subject to separate planning applications from National Grid, which is undertaking that work.

I reassure my noble friend that the wider offshore wind environmental improvement package has an evidence programme looking at all environmental impacts of offshore wind and how to address them, including a workstream on the impact of noise on marine mammals. The offshore wind environmental standards will use that evidence base to suggest any appropriate mitigation measures that developers can take. With that explanation, I hope my noble friend is reassured that existing legislation provides for robust protection for wildlife and for our marine habitats, and will therefore feel able to not press her amendments.

I turn to the question from the noble Lord, Lord Teverson, about whether the fund is voluntary. The marine recovery fund will be an optional framework through which developers could discharge a condition of their consent, to compensate for any adverse environmental effects on a protected site or sites that cannot otherwise be avoided or mitigated. Developers will of course retain the ability to deliver compensation outside the MRF. Again, Defra is currently looking at a range of potential operators for the fund. We will set out further details in the regulations when they are tabled, and I am sure we will have further debates on that important subject. I thank noble Lords for their contributions to the debate.

[Baroness McIntosh of Pickering (Con)]

Would my noble friend explain the status of the mitigation package, with compensation coming last and mitigation, recovery and all the other aspects coming first? What is its status in law?

[Lord Callanan (Con)]

Yes, of course, mitigation avoidance will always come first. It is only as a last resort, if it cannot be avoided or mitigated, that compensation will be looked at as an alternative—only at the very last stage.

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[Baroness Worthington (CB)]

I dispute that point completely. It is not about virtue-signalling; it is about moral leadership. There is a difference. When the UK stood up and passed legislation on climate change, and took those measures to pass net zero, the rest of the world took notice. We can do the same on this issue, and we will need to. It does not have certainty because it depends on who you talk to in the City. At the moment, many people in the City are saying, “Woohoo!” Everybody is piling on to fossil fuels, with record high profits and huge amounts of money to be made in the short term. That short-termism is going to send us as a society collectively off a cliff. We do not want to see that. What happens in that uncertainty is speculation. A huge amount of trading that goes on with these commodities creates a bubble that all of us then pay for. I do not want to see any more of that; I want it to become a regulated industry that is declining according to an agreed strategy. Otherwise, I have no doubt that they will push us off a cliff; arguably, they already have.

I turn to other amendments in this group. I do not want to get into a debate about fracking but, for the record, I remember being on the Front Bench when we debated fracking regulations in our debates on the energy Bill that introduced them. Why did the industry not spot this at the time? Perhaps it was a clever move by the Lib Dems that it did not spot, although I would find that surprising. There is a host of regulations that have been passed on this issue. I am not averse to us looking at these seismic limits again because nobody wants to hold the Bill back on that basis. However, my contention is that the time has passed and it will be too slow to make a significant contribution to our domestic gas supply. We would be far better off electrifying everything and reducing primary energy demand by at least a third in that process.

That brings me on to Amendment 224, tabled by the noble Lord, Lord Moylan. Surprisingly, I quite like this amendment because it would force us to think about how we could reduce our domestic reliance on gas. Within that timeframe, no fracking is coming online, I am afraid, so the only option left is massively reducing our dependence on gas. That means electrification, not just because it is abundant, clean and cheap but because it is much more efficient. It is an energy-efficiency measure to electrify, taking down primary consumption. I feel confident that, if we were to produce a strategy, we would see a huge amount of electrification being brought on. That may well be what we should be doing; in fact, Amendment 242, which we debated previously, would have asked the Government to do just that. Perhaps there is something here to come back to on Report.

I turn to Amendment 227A; it was not debated but I am sure that we will come on to it. I just want to say that I lend my support to that renaming.

On Amendment 227AA in the name of the noble Baroness, Lady Sheehan, flaring is absolutely ludicrous in the sense that we should not be allowing this resource to be burned without it being captured and brought to market. However, there is something worse than flaring: venting. I want to hear some reassurance on the banning of flaring—it has been banned at times, specifically for wildlife protection reasons as I remember it—because it can lead to venting. That means allowing methane to be released into the atmosphere, which would be far more damaging and much harder to track. I would not want to see this amendment agreed to unless that issue was addressed.

We have had a debate about coal. If we are looking at this Bill holistically—I offer the Minister this thought for free—there is a way through the apparent contradiction around allowing us to exploit in environmentally sensitive ways the continued use of our own fossil resources where that will avoid us bringing in more polluting sources from America, which I think is the case at the moment. What about a climate recovery fund? We have just created a marine recovery fund for the almost non-existent damage that the offshore wind industry creates. What about a climate recovery fund for the very real damage that the continued extraction and burning of fossil fuels causes? Why do we not innovate around that policy? It would be easy to implement it. It could become a condition of all future licensing of fossil fuels in this country. We could work out the price we think should be paid and give the industry an incentive to make CCS work. That is something the Government could look at; I would be happy to meet the Minister to discuss it but I have only just thought of it.

[Baroness McIntosh of Pickering (Con)]

My Lords, I was not going to speak, but I think I am the only person in the Committee who has had first-hand experience of a planning application for fracking, which was in my then constituency. This is a classic example of what a broad church the Conservative Party is, because I support Amendment 223 in the name of the noble Lord, Lord Teverson.

I think my noble friend the Minister is going to reply that the government position is that we will only proceed to frack—if I am completely up to date—if local communities are agreeable to it. My concern is how you determine whether the local community is agreeable to it. I am minded to be guided by the science, which is very clear. The British Geological Survey says that

“it is well known that hydrocarbon exploration and production can result in man-made or ‘induced’ earthquakes”.

It goes on to say that fracking is one of the usual causes of these manmade earthquakes.

I am more pro-European than pro-American. What works in America—in the wide open spaces of North America, which are very sparsely populated and have a very isolated population in most cases—does not work in counties like North Yorkshire.

One of the reasons I took the title of “Pickering” is because there was an application in Kirby Misperton. It was well funded by Third Energy and underscored by Barclays. I am delighted to say that the reason it failed—and why I think no future application will be made—is that there was nowhere to put the polluted water. That area is prone to water stress, not only because of its proximity to Scarborough, but because that north-eastern corner of North Yorkshire is prone to water stress. Sometimes we have flooding, as there is in York at the moment. That particular corner is very water stressed. The problem was that there was nowhere to put the polluted water. There was also the usual problem, which all MPs are familiar with, of very narrow rural roads and heavy lorries coming in at the construction phase. The locals did not like the congestion. It was also very close to Flamingo Land, which is probably the second most frequently visited attraction after the North Yorkshire Moors Railway. That is also in Pickering.

With those few remarks, I am minded to support the amendment in the name of the noble Lord, Lord Teverson, rather than my own Government’s position.

[Baroness Blake of Leeds (Lab)]

My Lords, I thank everyone for the discussion. I want to start with Amendment 223 in the name of the noble Lord, Lord Teverson, but I do not intend to open another strand of debate on this. Obviously, the Minister will come back to it.

Picking up on the point made by the noble Baroness, Lady McIntosh of Pickering, from all my experience in planning, I really struggle with leaving these decisions to the planning system. There has obviously been the intervention of the Planning Inspectorate in the decision on the coal mine in Cumbria. We must have much clearer policies to guide us as we go forward, rather than effectively setting people against each other. One year ago, would we have anticipated that this debate could have such a devastating impact on the Government of the day, with the Prime Minister effectively falling afterwards? The heightened emotion of this debate in the Commons is something to behold. I want to clarify that Labour Party policy is to move to a permanent ban on fracking. I think it is very clear where we stand in that regard.

I will also comment on the debate from the noble Lord, Lord Teverson, on coal mines and Amendment 232. I honestly do not think that we could sum it up any better than the president of COP 26, Alok Sharma. On hearing of the possibility, he said:

“A decision to open a new coal mine would send completely the wrong message and be an own goal. This proposed new mine will have no impact on reducing energy bills or ensuring our energy security.”


This was quoted in the Observer on 3 December. I do not know whether noble Lords looked at the press coverage around the world following the decision, but the reputational damage that was done to this country in this space through that one action is incalculable—it is, frankly, shocking.

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Amendment 233 is on the capacity market. In the last couple of weeks, the Government have started a consultation on this—exactly around decarbonisation—and I very much welcome it. As we all know, the capacity market had a bad reputation when it started. I seem to remember that the first round was all about diesel generators, but we have moved well on from that. I would like to understand from the Minister the way that we move forward. Is it likely to include demand-side management as well, and all forms of storage technologies? It quite rightly encourages long-term storage strategies, but does it cover all storage strategies? The capacity market is an important way in which energy security works in this country. I believe that this is exactly the right way forward on looking for more decarbonisation. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I shall speak to Amendment 229, which is tabled in my name.

Although I am against fracking, I am very much for energy from waste, and I am very proud of the facility close to the A1 at Allerton which is creating energy from waste material that is difficult to dispose of and used to go landfill. The benefits of energy from waste are twofold: we are creating an energy strand and we are disposing of waste. I think there is still an incinerator in Sheffield. I understand it was created by the Liberal Democrat administration at the time of the severe floods in the 2000s. One of the reasons for it was that there was a large quantity of furniture and other items damaged by the floods that needed to be disposed of very quickly. I hope that my noble friend will be minded to do more on energy from waste. Where it works, it works very effectively. We could learn from the experiences of other European countries, notably Denmark and other Scandinavian countries, Austria and Germany. In Allerton at the moment, the energy created is going into the national grid. I argue it should go to the local community. Allerton is one of the coldest parts of the country, and it would be in its interest to have a cheaper source of fuel.

The criticism that is made of energy from waste is around potential emissions. Looking at the BEIS figures which were brought to my attention thanks to the House of Lords Library, I see that the emissions figure for waste incineration was static between 2016 and 2020, at just 0.3 million tonnes of carbon dioxide equivalent, whereas the waste management total stayed at around 17 million tonnes of carbon dioxide equivalent and landfill was off the stratosphere, with extremely high methane emissions. That is another argument in favour of energy from waste.

I hope my noble friend will look favourably on rolling out more projects on energy from waste, such as those he knows about from exchanges we have had on the Floor of the House.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. I have Amendment 242A in this group, which is supported across all parties in the Committee—I am grateful to noble Lords who have signed it. It is similar to Amendment 228, which has just been moved by the noble Lord, Lord Teverson. There is a choice of amendments for the Minister, because we have the Labour amendment later on.

Like the noble Lord, Lord Teverson, I am in some ways indifferent to which of the three amendments the Minister supports or to whether he wants to put forward different drafting himself, but I hope that the number of ways the Committee has brought forward this issue will persuade the Government to move. It is worth saying that there is not just support from different parties and political support, and from the Skidmore report, as the noble Lord, Lord Teverson, said, but great support for replacing the existing language of Ofgem’s objectives and duties in the Electricity and Gas Acts with a new text which makes reference to enabling the Secretary of State to meet the targets set out under Part 1 of the Climate Change Act.

As has been said, the future systems operator—the new regulator created by the Bill—does have a specific statutory net-zero objective linked to our climate change targets. However, this is weakened by the fact that there is no equivalent provision in relation to Ofgem, which has only the much more limited duty given to it in the Energy Act 2010. In their consultation on the future systems operator, the Government noted that

“There were several strong calls for Ofgem’s remit to be reformed to focus on enabling net zero in the most economic and efficient way”.


This view is also shared by your Lordships’ Industry and Regulators Committee. I am sure that the noble Lord, Lord Hollick, who signed my amendment, will go into the committee’s rationale for this recommendation.

The case for updated net-zero duties goes far wider than this House or political circles. It has been argued for by environmental organisations such as Green Alliance but also by industry bodies such as Energy UK, the main trade body for energy, representing over 100 energy suppliers and generators. It has said that strengthening Ofgem’s statutory duties to explicitly support the delivery of the legally binding net-zero target would help ensure it balances the needs of both current and future consumers.

As has been said, the Skidmore review has been published in the last few days. It recommends that this change takes place to ensure that Ofgem gives sufficient weight to net zero and to incentivise network companies to plan ahead, emphasising the importance of future-proofing our energy infrastructure. It is essential that Ofgem is given, by government and Parliament, a very clear remit and role as to the importance of net zero and that it recognises the cost to consumers of delayed action. Regulators, given explicit responsibilities by government and Parliament, have a key role to play in demonstrating cross-government commitment to reducing carbon emissions. There is widespread support for this change and I hope the Minister will be able to respond positively to it.

I will turn briefly to two other issues. I record my support for the case made by the noble Baroness, Lady McIntosh of Pickering, and hope that she too will get a positive response.

Turning to Amendment 229 in the name of the noble Lord, Lord Teverson, to which I have added my name, the Minister and I have had many exchanges on the topic of onshore wind. I should start by saying that I welcome the movement the Government have made here and that they have opened a consultation on changing the National Planning Policy Framework guidance on onshore wind, to remove the effective moratorium to allow a new development where the proposal has community support and to encompass the repowering of existing sites.

I also welcome the commitment in the Written Ministerial Statement that the Government intend to make changes by the end of April this year. It is important that we move forward with some speed on this. It is now three years since I tabled a Private Member’s Bill to deal with this issue specifically. In that time, wind farms could have been built in the appropriate places, feasibly adding to the grid at this precise moment and reducing our reliance on expensive gas and foreign imports.

The amendment is not overly prescriptive, as the noble Lord, Lord Teverson, has laid out; it simply requires the Secretary of State to set out a plan as to how more onshore wind farms will be deployed. It does not force the installation of turbines anywhere and would complement the existing consultation, which is focused on allowing communities which can show demonstrable support for onshore wind the ability to install it.

It would indicate the need, and the recognition of the need, for an overarching plan. RenewableUK has long called for the Government to set targets for new onshore wind and solar capacity:

“While onshore wind and solar are now eligible for CfDs, there is no clear medium- to long-term ambition.”


I hope the Minister will recognise that setting a target of 300 gigawatts by 2030 would create 27,000 high-quality jobs and add £45 billion to the UK economy. It is time to set a target now and to be ambitious. I hope the Minister will respond positively.