Energy Update

Debate between Wera Hobhouse and Greg Hands

Monday 5th September 2022 Commons Chamber

[Greg Hands]

Let us be absolutely clear: the new Prime Minister has said that there will be announcements very shortly on the support that will be there. The hon. Gentleman throws his hands up in the air, but he was first elected, if I am not mistaken, under the last Labour Government. When it comes to acting quickly, it took that Labour Government more than 10 years to reverse their policy on nuclear energy, so perhaps he might like to reflect on how quickly Governments can move, and see that this Government have moved incredibly fast to react to changing circumstances on both energy prices and energy supply.

[Wera Hobhouse (Bath) (LD)]

To continue the theme, small businesses will be among the worst hit by the soaring energy bills. Bath Aqua Glass is one of many businesses in my constituency that have told me their energy bill will go up 10 times—not 10%, but 10 times. The company’s bill will go from £14,000 to £130,000. The whole energy sector is completely out of control. We Liberal Democrats have called for emergency covid-style support for small businesses. What are the Government doing, not just in the short term to support small businesses, but in the long term to fix the broken energy sector?

[Greg Hands]

I have already said that this is a priority for the new Prime Minister, and I would expect there to be announcements shortly on what is being done. Businesses are the core of our concern here in relation to energy prices. There is of course no energy price cap for businesses, and we recognise the challenges that businesses—particularly small and medium-sized enterprises that do not qualify as energy-intensive industries but nevertheless use a lot of energy—face at this time. That is exactly the sort of thing the Government are actively looking at.

Shale Gas Production

Debate between Wera Hobhouse and Greg Hands

Tuesday 15th March 2022 Commons Chamber

[Greg Hands]

My hon. Friend has represented Blackpool incredibly ably for the past 12 years and knows his community well. He makes, again, a strong point about the importance of community consent. He also makes the point about the speedy implementation of alternative, cheaper and cleaner forms of energy. That is why we announced, just a couple of weeks ago, a contracts for difference renewables auction on an annual basis to do precisely that.

[Wera Hobhouse (Bath) (LD)]

Renewables are the cheapest form of energy. It is a well-established industry; fracking is not. Reading the room, I think it is very clear that that is understood here, so why do the Government not ban fracking altogether? The Government have already made new commitments to renewables, but is not now the time, given this new challenge—there is a new challenge; we might not call it a crisis—to double and treble on the plans that are already in the pipeline and make and plan for even more renewables than the Government are currently doing?

[Greg Hands]

The hon. Member calls on us to double or treble renewables. That is not good enough. We are going for the quadrupling—the quadrupling—of our offshore wind capacity in this decade. It is already the largest in Europe. We are not just doubling or tripling —we are quadrupling that capacity.

Oral Answers to Questions

Debate between Wera Hobhouse and Greg Hands

Tuesday 22nd February 2022 Commons Chamber

[Greg Hands]

I am not aware of any rejection by the NDA of increased transparency. I am happy to look at what the hon. Lady has to say; my experience from quite a few meetings with the NDA is that transparency is very good, but I am happy to engage with her if she has a specific concern in relation to transparency in any nuclear plant in or near her constituency.

[Wera Hobhouse (Bath) (LD)]

To deliver the Government’s ambitious roll-out of renewables such as solar—but also nuclear electricity, if that is what the Government want—we need to proactively develop grid capacity. Why have the Government still not reformed the remit of Ofgem, which is a real barrier to increasing grid capacity?

[Greg Hands]

The hon. Lady is right: we have to make sure that our grid capacity is good for the big expansion of renewables, and indeed for the big expansion of nuclear, which is what this question is about. By the way, she might have a conversation with some of her colleagues, two of whom have recently mentioned support for nuclear— against Lib Dem party policy, it would seem. We and Ofgem are looking very actively at grid capacity: a lot of reviews are going on and there is a lot of action to ensure that grid capacity is in place, not least for the quadrupling of our offshore wind capacity.

North Sea Oil and Gas

Debate between Wera Hobhouse and Greg Hands

Wednesday 9th February 2022 Commons Chamber

[Greg Hands]

My hon. Friend puts it very well and succinctly. The key word to use is “transition”: the transition from our existing energy mix to the energy of the future.

[Wera Hobhouse (Bath) (LD)]

Granting new oil and gas exploration in the North sea flies in the face of the Government’s net zero commitment. Closer to home, the Tory-controlled Surrey County Council is defending in court a decision to approve four oil wells in Horse Hill, Surrey. Why are the Government getting behind Surrey County Council’s defending in court the destruction of green land and the introduction of massive new CO₂ pollution, in direct conflict with their own net zero ambition?

[Greg Hands]

On the second matter, it would not be right for me to opine on planning decisions. On the first, the licences are not new—I do not think the hon. Lady heard my statement—regardless of what she may read in The Daily Telegraph. In some cases, they were granted as early as 1970. The issue is how those licences are taken forward once they have regulatory approval.

Oil and Gas Producers: Windfall Tax

Debate between Wera Hobhouse and Greg Hands

Tuesday 1st February 2022 Commons Chamber

[Greg Hands]

I have been clear that matters of taxation are for the Chancellor, but of course the Government continue to monitor the situation very closely. I was answering a specific point about what support is already available for consumers.

I did not hear a word from any of the Opposition parties in support of our incredible North sea transition deal, concluded just last March, between the UK Government and the oil and gas sector. It will support workers, businesses and the supply chain through this transition by harnessing the industry’s existing capabilities, infrastructure and private investment potential to exploit new and emerging technologies such as hydrogen production, carbon capture, usage and storage, offshore wind, and decommissioning.

[Wera Hobhouse]

rose—

[Greg Hands]

I will make a bit more progress.

We will see commitments from industry that will achieve a 60 megatonne reduction in UK greenhouse gas emissions, including 15 megatonnes through the progressive decarbonisation of UK production over the period to 2030, which puts the sector on a path to deliver a net zero basin by 2050.

I turn to the contributions in the debate itself. My right hon. Friend the Member for Wokingham (John Redwood) made an excellent speech. He said: please can we burn our own gas, rather than importing it? That is a really strong point, not just in terms of jobs in this country but for our energy security as well. It makes no sense for us to be importing, beyond what we have to, expensive volatilely priced foreign hydrocarbons—hydrocarbons that come with a significantly increased emissions content. LNG has up to two and half times the emissions content compared with natural gas produced in the UK. He also made strong points about tax revenues.

My hon. Friend the Member for Banff and Buchan (David Duguid) knows oil and gas better than anybody in the House. The sector is hugely important for his constituency, as I saw when I visited in December. He talked about the punitive intervention that Labour is proposing. He also rightly pointed out that renewables have increased by four times under Conservative Governments since the right hon. Member for Doncaster North was Secretary of State.

My hon. Friend the Member for Waveney (Peter Aldous) talked about the unintended consequences. He is right that in the transition we need the oil and gas sector to co-operate with the offshore wind and hydrogen sectors. He is the living embodiment of transition, representing both the older and newer energy industries.

My hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie) made an excellent speech. He praised British business and discussed how Labour is giving up on Aberdeen. Mr Deputy Speaker, you, the right hon. Member for Doncaster North, the Labour Chief Whip, the right hon. Member for Tynemouth (Sir Alan Campbell), and I were here in the days when Labour had two Members of Parliament for Aberdeen. It has now totally given up on the North sea and the North sea transition deal, and the jobs that it represents. My hon. Friend’s excellent speech was about how Labour is giving up on Scotland. We have seen the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) implicitly doing a deal with the SNP—it was implicit in one of his rare visits to Scotland just this last week.

My hon. Friend the Member for Poole (Sir Robert Syms) made another excellent speech, rightly pointing out that energy prices are rising due to world economic recovery and praising the work of this Government on job numbers and economic recovery. I agree with him. The North sea is a great British success story. He also made a really strong point about nuclear energy.

I want to correct a few points made by Labour Back Benchers. The hon. Member for Birmingham, Hall Green (Tahir Ali) made an extraordinary speech. He seemed to be saying that companies cannot make a loss without going bust. That is extraordinary: of course companies can make a loss without going bust. The hon. Member for Sunderland Central (Julie Elliott) made some important points about the supplier of last resort processes. If she has constituents whose credit balances are not being transferred from their previous suppliers to their new suppliers, could she write to me—or even better, to Ofgem—with details? I am sure we could look at that.

The right hon. Member for Leeds Central (Hilary Benn) made his usual quality speech. He said that there are not enough heat pumps—of course there are not. The role of the Government, though, is not to provide a heat pump for every home but to stimulate the private sector heat pump market, so that it can provide that solution. He asked where our plan was for 10, 15 or 20 years’ time. The answer is the net zero strategy, which we published back in October and which the Climate Change Committee says is a leader in the world.

We then heard from the SNP spokesman, the hon. Member for Aberdeen South (Stephen Flynn). I am afraid his nice words about oil and gas are at odds with his party overall, which has a nonsensical energy policy. The people of Scotland will be relieved that energy policy is reserved.

Not only is the SNP anti-nuclear, cheering the closure of plants such as Hunterston and Chapelcross and reportedly telling Rolls-Royce that its small modular reactors are not welcome in Scotland, but the hon. Gentleman’s colleagues and the Scottish First Minister seem to be opposed to new gas licences off the Scottish coast. They want to close oil and gas down. They say they want a windfall tax—just not the same windfall tax that Labour wants. They are still on a mission of trying to close down the industry. The SNP is against Scottish energy consumers, it is against Scottish energy jobs and it is against Scotland’s energy transition.

To finish off, Labour is still in a state of confusion. This time, the motion is not four pages. It has been shortened to around 100 words—or perhaps 280 characters; I am not quite sure. Where Labour has cut the words, however, it has not made up for them with any numbers. The motion includes no costings. There are no numbers in it at all. We have no information about this windfall tax and no information on the package of support for families and businesses. There is no detail there, but still a lot of confusion. There are no impact assessments on the taxes raised, on jobs—there are 40,000 jobs in north-east Scotland and 195,000 jobs in all—on fuel bills or on gas production.

Labour has split energy from climate change; the right hon. Member for Doncaster North is the person who combined them, and now the Labour Front Bench has split them, which means inevitably it is following a policy of hammering business. Labour is not the party of business; it is the party against business. The hon. Member for Kilmarnock and Loudoun (Alan Brown), who often makes quite acerbic interventions on other Opposition parties’ policies—I sometimes wish he would probe his own party’s policies as well as he probes those of others—asked whether the Labour Front Bench had spoken to anybody in the sector, and there was no answer. We did not hear anything about whether it had engaged with anybody in the sector.

Does Labour agree with our ground-breaking North sea transition deal? No answer. Its solution is, again, to hammer domestic UK continental shelf production and increase imports, reducing our energy security and increasing our emissions at the same time. Labour’s approach is confused and misguided. It is not a plan, it is a motion for less energy security, higher emissions and higher fuel bills. I urge the House to stick with our approach: North sea transition, support for households and the UK’s remaining open for business.

Nuclear Energy (Financing) Bill

Debate between Wera Hobhouse and Greg Hands

Report stage & 3rd reading
Monday 10th January 2022 Commons Chamber

[Greg Hands]

No, I will not. I will try to respond to the debate.

Amendments 3 and 4, tabled by Labour, address how additional costs beyond the financing cap could be paid for. I agree that any RAB scheme must have adequate protections in place for consumers. However, given the size and importance of a new nuclear project, there must be a mechanism in place, with appropriate protections, to allow additional capital to be raised to ensure completion of a project where the financing cap is likely to be exceeded. The amendments proposed by the official Opposition would nullify the ability to be flexible. We are making sure that we do not have to go down that course to carry out robust due diligence on the project in the first place, having learned from existing and current projects to set a robust estimate of project cost.

SNP amendments 7 and 8 refer to reporting requirements. Planned outages at nuclear power stations may happen for a variety of reasons, and it is right that they are governed by the amount of time required to complete the maintenance—the actual cause of the outage in many cases—rather than the arbitrary time limit set out in the SNP’s amendment. Both the Office for Nuclear Regulation and National Grid already work closely with nuclear operators with regard to outages and availability, and they should do so independently of the Government. Nevertheless, I would like to reassure the hon. Member for Southampton, Test that we are aiming to design the RAB regime so that the nuclear company is incentivised to maintain availability.

I turn now to amendment 5, tabled by Labour. It deals with situations whereby a RAB project

“cannot be rescued as a going concern”,

having entered special administration. Of course, I share the wish of the hon. Member for Southampton, Test that the special administration regime should protect consumer interests, but the amendment could have the impact of damaging those interests. We expect the insolvency of a nuclear RAB company to be a highly unlikely event. However, there may be even rarer circumstances within this where it is actually in the best interests of both consumers and taxpayers to discontinue the project, and for it to be safely decommissioned—for example, if a safety fault, which is very unlikely, discovered at a plant made it, in practical terms, inoperable. It is important that the Secretary of State retains the discretion to act in whichever way can achieve the best outcomes for consumers or taxpayers during the insolvency of a relevant licensee nuclear company, and the Opposition’s amendment would remove this discretion.

Finally, I would like to discuss amendment 10, tabled by the SNP. It is important to make it clear that special administration is a court-administered procedure and that the nuclear administrator is an appointee of the court. There is already an appropriate level of transparency through the court process for the transfer.

I will now deal with other points raised in the debate. My right hon. Friend the Member for Wokingham (John Redwood) asked about new supply, particularly in relation to gas, which is not on the face of the Bill. I can tell him that six new gas fields came on stream in the last quarter of the last year: Arran, Columbus, Finlaggan, Tolmount, Blythe and Elgood. It is not the case that there are no new gas fields coming on stream. Gas is, of course, heavily incentivised at present, simply by the price, for there to be more extraction. According to the developers’ estimates, Hinkley Point C could be online or start to come online as early as 2026. However, my right hon. Friend is right that we need to think ahead. I should Make it clear that I welcome the official Opposition’s support for the Bill overall, but let us not forget that awful 1997 Labour manifesto, which said:

“We see no economic case for the building of any new nuclear power stations”—

not just state-owned nuclear power stations, as my right hon. Friend said. Hinkley Point is being built, and an amazing job has been done to keep that construction work going through the pandemic. Our nuclear industry deserves congratulations.

The hon. Member for Bath (Wera Hobhouse) said that we should be rolling out renewable energy. That is exactly what we are doing. We have massively expanded our offshore wind power, and we are quadrupling it over the next decade. I think she said that Germany did not have any wind, but it has a target of 30 GW of offshore wind. There is a lot of wind in Germany. I know that she is from Hanover, which is a long way from the sea, but there is even a famous film—it is one of the best German films—called “Mit dem Wind nach Westen”, which is all about wind carrying people in balloons from east Germany to west Germany. There is most definitely wind in Germany.

[Wera Hobhouse]

Will the Minister give way?

[Greg Hands]

No, I will not give way.

My hon. Friend the Member for Ynys Môn (Virginia Crosbie), who described herself as one of the original atomic kittens—my hon. Friend the Member for Copeland (Trudy Harrison) is the other one—gave a passionate speech in favour of civil nuclear power. She is right that the Bill is all about financing, making cheaper and alternative sources of finance.

Again, I welcome the Opposition’s support for the Bill, but the hon. Member for Warrington North (Charlotte Nichols) was wrong to point the finger of delay at the Government. I should point out the 1997 Labour party manifesto and how nothing happened for 13 years. Hinkley Point C is now being built.

My hon. Friend the Member for Isle of Wight (Bob Seely) made a fantastic speech. He was quite right that the Bill’s purpose is to reduce dependence on foreign developers. He is right that we are not in a perfect position when it comes to energy or to nuclear power, but the Bill will significantly improve that position by creating options and establishing expertise for us to go forward.

The hon. Member for Strangford (Jim Shannon) made important points about Northern Ireland. I speak to Gordon Lyons quite often, and obviously Northern Ireland has a special status for energy and electricity.

My hon. Friend the Member for Gloucester made a fantastic speech and fantastic interventions. I am sure that his hub of expertise in Gloucester will come in incredibly useful, and I of course agree to visiting it.

I turn finally to my right hon. Friend the Member for Maldon (Mr Whittingdale). Bradwell, which has been a successful site in Britain’s civil nuclear experience, is at a very early stage of development and not a decision for now. Of course, in terms of the future of the site, the Bill is not site-specific; it is all about financing.

This has been an excellent, wide-ranging debate and I thank all right hon. and hon. Members for their contributions.

Community Energy Schemes

Debate between Wera Hobhouse and Greg Hands

Tuesday 30th November 2021 Westminster Hall

[Greg Hands]

Thank you, Mr Betts; let me carry on. It is important that we take a broad view of all consumers when making changes to the energy markets. That includes consumer protection measures, which form an important part of the supply licence. Suppliers play a key role in providing support to customers, particularly the vulnerable. For example, the energy company obligation requires suppliers to install energy efficiency measures in the homes of vulnerable people. The warm home discount applies a reduction to the bills of vulnerable households, and the price cap protects households from poor-value tariffs. The priority services register is used by suppliers to identify consumers who may need additional support with their energy supply. Of course, suppliers sometimes fail, but we have vital safety nets to ensure supply—as we have seen since the last debate—through the supplier of last resort, or SoLR, process. I would be concerned about the deliverability of such protections under a local electricity supply regime.

Let me turn to the three questions that the hon. Member for Bath asked specifically. I think that I have answered the question on future energy legislation. I have outlined, I think, some of the difficulties with the current Bill as proposed. Also, I think that I have gone into the distortions to the energy system just now and before in some detail. And will I meet her? As I have mentioned, I have an existing commitment to my hon. Friend the Member for Wantage, but I am happy for people to come together. That was the commitment that I made to him—to meet Members with an interest in this area.

[Wera Hobhouse]

I was originally a little disappointed that the Minister’s invitation went only to his colleague the hon. Member for Wantage (David Johnston), but if he has already fixed a meeting and he is opening it out, may I ask whether there is already a fixed date for it that he can share with us?

[Greg Hands]

I appreciate the hon. Lady’s line of questioning. I replied specifically to a letter from my hon. Friend the Member for Wantage seeking a meeting. I think the best thing to do would be for me to speak to my hon. Friend or for her to approach him—it would effectively be his meeting—to find the best way forward. I am keen to be as accommodating as possible to Members across the Chamber, but I responded to the letter that my hon. Friend the Member for Wantage sent me, which I think was on behalf of a group of Members. [Interruption.] In that case, I think the best thing to do would be for the hon. Member for Bath to approach, first, my hon. Friend the Member for Wantage.

On the question of the cost to consumers, though costs are reduced for the few in the scheme, that avoids market costs, which fall on those not in the local scheme. That often includes the fuel-poor, who cannot buy into such schemes.

Germany was mentioned many times. Without going off and setting up my own separate Adjournment debate, there are reasons why Germany works well, and less well, in this space. Germany’s grid, for example, makes it very difficult to get renewable energy from the North sea down to Bavaria. Its grid is not set up in the same way that ours is, on a national basis. That can have advantages and disadvantages. I also point out Germany’s reliance on imported gas from abroad. That again stresses some of the difficulties in scaling up; even in Germany, which has been praised for community energy, it does not necessarily offer a scalable solution in that same way.

The hon. Member for Brighton, Pavilion (Caroline Lucas) asked about the continuing expansion of the rural community energy fund. I will look at the options for funding as part of Department-wide planning.

My hon. Friend the Member for Waveney (Peter Aldous) asked five questions; I will try to deal with them as quickly as possible. First, derogation is possible; Ofgem consulted previously on widening the use and geographic premises licences are possible. Secondly, the right to supply is possible; BEIS will work with Ofgem on retail market reform. Thirdly, this is really a matter for Ofgem, which can do a local supply licence, but we can set out why we do not agree with a local supply licence. Fourthly, we are looking at the supply hub model as part of the retail market reform. It is a complex issue, which, of course, has implications for things such as the smart meter roll-out, and so on. Fifthly, I think we have already covered the smart export guarantee scheme.

The hon. Member for Strangford (Jim Shannon) asked about Northern Ireland. As he and I well know, it is a unique energy market. I am having a meeting with Gordon Lyons, the Northern Ireland Economy Minister, on wider issues tomorrow, and I will try to feed this into a conversation with him. The meeting is with the three devolved Administrations, but I will find an appropriate time to ask him about how we can work together on community energy schemes.

Mr Betts, I think you said we were finishing at four—

Net Zero Strategy and Heat and Buildings Strategy

Debate between Wera Hobhouse and Greg Hands

Tuesday 19th October 2021 Commons Chamber

[Greg Hands]

My hon. Friend is tireless in his ability and desire to get to the bottom of what lies behind Government figures. Perhaps I might commit to meet him, as, having taken on this brief four weeks ago, I know he takes a strong interest in all aspects of energy and climate change. Perhaps I might agree to meet him to discuss his concerns first, before committing to a new, huge audit of anything.

[Wera Hobhouse (Bath) (LD)]

I welcome the Government’s setting an end date for the use of gas boilers, but of course switching to electricity for heating our homes makes sense only if the electricity used is not derived from fossil fuels. Because of the Lib Dems in government, the renewables sector has made big strides, but it is by no means accelerating in the way it should be. So will the Government take the opportunity before COP26 to announce an end date for using fossil fuels in the production of electricity?

[Greg Hands]

We already have, as I mentioned in the statement, our commitment to a decarbonisation of our electricity system by 2035. However, may I take issue with her about renewables because we have had a massive amount of success, particularly since 2015? The cost of offshore wind, for example, has been reduced by two thirds since 2015, when there was a sole Conservative Government. We also have the commitment to have a really big increase in renewables. We currently have the world’s largest installed offshore wind capacity, at about 10 GW. We are committed to not resting on our laurels and to quadrupling that capacity in the next 10 years, to 40 GW.

Oral Answers to Questions

Debate between Wera Hobhouse and Greg Hands

Tuesday 21st September 2021 Commons Chamber

[Greg Hands]

My hon. Friend is right. Nuclear power is a vital part of our future energy mix. We have committed to trying to achieve at least one more gigawatt power plant during this Parliament and we have set out plans for small and advanced nuclear reactors.

[Wera Hobhouse (Bath) (LD)]

May I press the Secretary of State further on blue hydrogen? The source of blue hydrogen is natural gas, which is a fossil fuel, so how can a Government committed to net zero invest millions of pounds in new technologies based on fossil fuels? The Secretary of State has said several times that it is a “transition”, but since this is not a net zero technology, a transition to what?