Climate Change

Baroness Sheehan Excerpts

Thursday 24th January 2019 Lords Chamber

[Baroness Sheehan (LD)]

My Lords, I thank my noble friend Lord Teverson both for bringing such an important debate to your Lordships’ House and for the breadth and depth of his introduction.

We in the UK have accepted that climate change is caused primarily by the burning of fossil fuels. We have committed to, and even led, international efforts to tackle climate change, including the 2015 Paris Agreement and the SDGs, especially SDG 12. As a member of the EU and the G20, we are party to the pledge to phase out fossil fuel subsidies, so why are we coming under increased criticism over our support for fossil fuel subsidies? A headline in yesterday’s Guardian stated that UK has the “biggest fossil fuel subsidies” in the EU. I know that the Minister will deny the claim, citing the Government’s own definition of a fossil fuel subsidy—which, by the way, is at odds with the WTO definition as agreed by 153 countries, including us. For the sake of argument, I will call it “UK financial support for fossil fuel projects”.

Although figures are hard to come by—transparency around this subject is a real issue—research conducted by the Overseas Development Institute and CAFOD shows that between 2010 and 2018, UK Export Finance supported a total investment of £3.8 billion in the exploration and production of dirty fossil fuels. Compare that to the paltry £29 million invested to support renewables over the same period. On the domestic side, the ODI figures show that in 2015-16, fiscal support for fossil fuel-based power for both industry and consumers totalled a whopping £7 billion. Surely it is time to stop the blanket subsidy and the support for fossil fuel-based power and instead target help towards poorer people both here and in the developing world.

A fundamental change is needed in our choice of the industries we want to support; such changes must be carefully managed in a responsible way, ensuring a gradual phase-in, with the retraining of workers and making sure that the removal of subsidies does not harm the poor and vulnerable. With the £7 billion to be released annually, we should be able to manage that. The fact is that corporations and the well-off among us benefit from this financial support, which is hardly fair when schools, hospitals and other public services are starved of cash.

Let me digress slightly and mention the “Give it up” scheme being trialled in India, where people have been asked to give up voluntarily their liquid petroleum gas subsidy. Some 10 million people have done so. The money generated is being used by the Government to provide cooking gas to poor families—now there is an idea.

Air and sea currents see to it that no matter who is responsible for pumping greenhouse gases into our atmosphere, the malign effects of climate change are felt across the globe. Poorer countries are the least culpable but they bear the most catastrophic consequences. I will quote from an article in this Tuesday’s Telegraph, which began:

“Mega-storms the size of England are increasingly savaging countries across the Sahel”.


The article, based on UK-led research, stated that,

“the Sahel—which hugs the Saharan desert from Senegal to Eritrea—has seen a threefold increase in mega-storms over the last 35 years. The ferocious storms—which produce roughly the same amount of energy in 12 hours that the entire UK consumes in a year—”

almost 6 billion gigajoules—

“can devastate everything in their path”.

Professor Chris Taylor from the Centre for Ecology & Hydrology, who led the research, said:

“Global warming is expected to produce more intense storms, but we were shocked to see the speed of the changes taking place in this region of Africa”—


the Sahel. That region is already plagued by poverty, irregular migration, smuggling and terrorist groups. I fear that we reap what we sow.

In November 2018, the International Energy Agency warned that the world has so many existing fossil fuel projects that it cannot afford to build any more polluting infrastructure without busting international climate change goals, which we now know are at the very limit that our planet can withstand. When the IEA, normally a very conservative agency, issues such a warning, we must take heed. But there is another way. The market in renewables is racing away. According to the IEA, solar generation in developing countries is forecast to expand from 2% today to nearly 10% by 2040. Battery storage costs are dropping rapidly and hydropower is set to remain big. The age of the internal combustion engine is over. Fossil fuels have had their day and it is time to stop using them and start to clean up after them. Locking Africa into dirty fossil fuel technology is to shackle it to the past, when the future is green. In the words of Archbishop Desmond Tutu:

“People of conscience need to break their ties with corporations financing the injustice of climate change”.


We should not be subsidising fossil fuels. It is wrong.

[Baroness Stedman-Scott (Con)]

My Lords, can I ask noble Lords to adhere to the allocated time? Any headroom we had has now gone and we will be biting into the Minister’s speech. Your help would be appreciated.

Brexit: Energy Security (European Union Committee Report)

Baroness Sheehan Excerpts

Wednesday 6th June 2018 Lords Chamber

[Baroness Sheehan (LD)]

My Lords, as a member of the sub-committee, I add my congratulations to those offered by other noble Lords to my noble friend Lord Teverson on his skilful chairmanship on this complex topic and to the clerks on excelling themselves in drawing together all the threads that make up this informative report.

Brexit is a far more traumatic experience than the joy-filled journey to sunlit uplands that was sold to the public. Your Lordships’ House has been instrumental in adding some realism to preparing for the journey, through the painstaking work of the EU Select Committee, which has produced reports of depth and quality on the opportunities and challenges that Brexit presents.

I have been a member of this committee while it has conducted several Brexit inquiries, including on the impact of Brexit on agriculture, fisheries, farm animal welfare and environment and climate change. It is clear to me that, of the sectors that the committee has inquired into to date, the arrangements that we currently enjoy within the EU with respect to energy security are those from which the UK reaps the largest benefit.

The energy market is ferociously complex. The finely-tuned balance that our membership of the internal energy market brings, to our advantage, was recognised by all expert witnesses to this inquiry, including by the Minister, Mr Harrington, who more than once in his evidence session stated that,

“our top priority is to be as near as possible to the current arrangements”.

That was also brought up by my colleague on the committee, the noble Lord, Lord Selkirk. We are hearing more and more that the Government are seeking “business as usual”, which is a real giveaway, because it gives us a clue that light is dawning that the deal we have forged over the decades within the EU is as good as it gets, allowing us to have our cake and eat it. Given that the Minister agrees that close association with the IEN is where we would like to end up, why are we setting red lines that could jeopardise our retaining the benefits of the IEM? In what alternative universe does this make any sense?

My contribution to this debate will focus on the cost of electricity, because energy security is as much about cost to those who do not have much money as about availability for the rest of us. Electricity markets in the UK, Ireland and continental Europe are physically linked by interconnector cables. Interconnectors are critical in ensuring a stable and secure energy system. They help integrate renewable electricity by smoothing out peaks and troughs across the EU, which is a key requirement if we are to meet our climate change commitments. The more we move towards renewables, the more important interconnectors become.

Crucially, interconnectors also offer lower costs to both system operators and consumers. While there was general agreement among witnesses that even in a no deal scenario we are unlikely to see tariffs on electricity, it is also clear that no longer being a part of the IEM would likely make electricity trading less efficient and more costly, as GB interconnectors could be excluded from current and future market coupling mechanisms—my noble friend Lord Teverson has already touched on this.

Market coupling is a mechanism by which IEM participants use a shared algorithm to arrange cross-border electricity trades by matching supply and demand efficiently. Research commissioned by the National Grid suggested that being excluded from market coupling and other balancing mechanisms could cost the GB system £260 million per annum. Energy UK expressed concern that GB operators could be excluded from market coupling if we were to leave the IEM without replacement arrangements,

“as there are no provisions in the texts for ‘third countries’”.

This was reinforced by His Excellency Jean-Christophe Füeg, head of international energy affairs at the Swiss Federal Office of Energy, who has already been quoted extensively today. He told us that Switzerland is excluded from market coupling despite a large, mutually beneficial energy trading relationship with the EU. I mention the testimony given by His Excellency because it underscores the importance of political considerations, which often supersede pure market considerations when it comes to dealing with the EU.

The cost of electricity is something I wish to focus on, so I will say a few words about interconnectors. At the moment, interconnectors supply 7% of the UK’s electricity. Another 14 gigawatts of capacity is either in preconstruction or at various planning stages, expected to become operational between 2019 and 2022. We are told that each 1 gigawatt of new supply through interconnectors could reduce Britain’s wholesale price of electricity by 1% to 2%. Clearly, the impact of this in terms of cheaper costs for consumers, ranging from 14 to 28%, is not lightly to be put in jeopardy; it would be negligent of any Government to do so. Yet this is what we are playing with when we toy with leaving the EEA: we are risking higher energy costs for those least likely to be able to afford them. NEA has warned that,

“the UK leaving the EU could … badly impact the people who struggle to keep their homes adequately warm”.

In response to the report’s recommendation 4, asking government to conduct and publish an assessment of the impact of leaving the IEM on the price paid by consumers for their energy and to take steps to mitigate this impact, particularly for financially vulnerable customers, the Government outlined a number of measures to help consumers manage their bills. Can the Minister give an assurance that no one, but especially those on minimum wage or on benefits, will have to pay more for energy as a consequence of us leaving the EU? Like the noble Lord, Lord Rooker, I live in no expectation of receiving any such confirmation from the Minister, but it may be a matter that we can come back to once the consequences of Brexit, whatever shape it may take, unfold.

I hope that the Minister will recognise, nevertheless, the value to the poorest in society of the UK being a meaningful member, with a meaningful seat at the table, of an energy market that is designed to achieve lower costs for its members—designed, in large part, through substantial UK input.