PARLIAMENTARY DEBATE
Energy Security - 29 November 2022 (Commons/Commons Chamber)

With permission, Mr Speaker, I will make a statement on energy security.

Over half the gas we use in this country is imported. A third of all our energy comes from other countries. Each click of the thermostat and every flick of the kettle sends our money abroad. We are lucky that we have access to secure supplies and strong alliances, but while the price of energy is dictated by the whims of international energy markets, it will be hard to release ourselves from the grip of high bills ushered in by Putin’s brutal invasion of Ukraine.

The solution is energy sovereignty. We have the ability to generate our own energy here in the UK. We need only look at our renewables to know we are already doing this rather well, but it is time for us to do more: to bring energy home; to clean it up; to reduce our reliance on dirty, expensive fossil fuels; and to create a thriving, secure and affordable energy network. We will use the might of our many brilliant engineers, experts and innovators to build a system fit for the future.

As I mentioned in questions earlier, yesterday I was in Suffolk where, thanks to Government investment, the development of the Sizewell C nuclear plant has been given the green light. It will generate not only cleaner, cheaper, low-carbon electricity for the equivalent of 6 million homes, but 10,000 jobs during construction and thousands more in the supply chain. This is the first direct stake a Government have taken in a nuclear project since 1987, and it is the first step on the ladder to long-term energy independence. This has been long awaited, and to boost the nuclear industry further we will work fast to scope and set up Great British Nuclear. With GBN we are aiming to build a pipeline of new nuclear projects beyond Sizewell C where they offer clear value for money, and we will make announcements on this early in the new year.

It is not just nuclear of course: in order to strengthen our energy sovereignty we must look to our natural resources. This island is, as students of Shakespeare will know, a “fortress built by Nature”, and we are utilising that which nature has bestowed upon us—the howling winds of our coastlines, the crashing waves of our sea, and the radiant sun across our land—to create green, clean, cheap energy at home for us.

Those industries are booming, providing jobs and growth up and down the country. In fact, earlier this month, the country hit a truly historic moment, when our onshore and offshore wind farms provided more than half the UK’s electricity. Furthermore, the National Grid reported that on that day all our renewable energy combined provided 70% of the country’s overall electricity needs. However, we need low-carbon back-up for those days when the wind is not blowing and the sun is dimmed, which is why I have put the Energy Bill back on track. It will fire up our nascent hydrogen and carbon capture industries by providing new business models and liberating private investment. The Bill will hammer into place the high-tech solutions we need to produce our own energy.

Even after record Government support for household and business bills, the British people need us to take bold action, and the war in Ukraine, combined with sky-high energy prices, has put a spotlight on the importance of energy efficiency. Our ambition is to reduce energy demand by 15% by 2030. That will be backed by £6 billion in cash between ’25 and ’28, coming on top of the £6.6 billion we have already spent during this Parliament.

The majority of British houses are, thanks to their Victorian builds, rather draughty. Our energy performance certificates did not really bother the estate builders of the 19th century, which is why our ECO+ scheme will help households install insulation, saving them hundreds of pounds off their bills each year—money they can spend elsewhere to grow the economy.

Energy sovereignty is now within our grasp. Clean, affordable energy for households and businesses is not a pipe dream; it is a project we have now embarked upon. Building new energy networks will create jobs; producing our own renewable energy will keep bills low; and as businesses and households are relieved of the pressure of crippling bills, the economy can flourish and grow. Energy is coming home.

I call the shadow Minister.

I do not think the right hon. Gentleman was in the Chamber earlier for Business, Energy and Industrial Strategy questions, but I did point to a quote from him back in 2010, when he said it was “pie in the sky” that the then new Conservative Government would get to 40% renewables by 2020. What happened? By 2020 we had got to 43.1% renewables. That is our record of delivery when it comes to renewables, so I do not think we need to take too many lectures from the Labour party, or from the party that five minutes ago did not support new nuclear power. It failed to commission any of it during its time in office—13 years, was it?—but now that we are getting on with it, all of a sudden it seems to have swapped sides.

On wind power, both offshore and onshore, I do not think the right hon. Gentleman recognises the fact that the strike prices in the contracts for difference are now lower for any version of power production at all when it comes to offshore wind. These turbines are now so large that they cannot even be constructed onshore. They are so big that the turbines cannot be carried by road; they have to put offshore.

How big are they? It is convenient that the World cup is on because the right hon. Gentleman will be able to envisage this. Single turbines are seven football pitches in scope, as they turn. They are not buildable onshore, which is one of the reasons why the cheapest way to build them offshore to produce energy offshore is to build these mammoth turbines, which go together in groups of 200 or even up to 300. However, I am sure he knows all of this and that, rather than discussing the actual solutions, he likes to throw up the chaff.

Since the right hon. Gentleman has mentioned onshore, I just want to note that the energy White Paper and the net zero strategy have both said exactly the same as we have been saying this week, which is that onshore can happen where it has local consent. I do not know why this local consent principle is so difficult for him to understand. There it is: we are delivering on the renewables, on the nuclear, on the energy independence and sovereignty that this country needs, and there is nothing from the Labour party.

Over the last 48 hours, wind has generated as little as 1% of our electricity, and it was at 2% when I checked this morning, while of course most of the homes we represent use gas for heating. Will the Secretary of State confirm that we need to get on with issuing more production licences for domestic oil and gas, which cuts the carbon dioxide involved and will enable us to keep the lights on, which we cannot do when the wind does not blow?

My right hon. Friend is characteristically correct that we cannot always rely on a single form of electricity generation. As the French have found out, we cannot always rely on nuclear. I think France has 71 nuclear power stations in its fleet, but about half of them are down at the moment, so it cannot rely only on nuclear. I was discussing this very fact with my opposite number yesterday. I know that my right hon. Friend welcomes the £700 million development approval cash that we have put into the first new nuclear since the 1980s, and he is absolutely right that we need a broad spread of different energy forms to ensure that we can provide the cheap power we require at all times.

I call the SNP spokesperson.

The reality is that this statement is just a padding out of the press release that BEIS put out earlier. I do welcome the energy company obligation funding for energy efficiency, but I think we need to be clear that this is not Government money; it is money funded from our energy bills and paid for by all bill payers. One issue with ECO4 is that it cannot be combined with other grants, whereas ECO3 did allow that money to be combined with other grants to bring down the costs of external insulation, for example. That is something the Secretary of State could consider to make schemes more affordable for people. The reality with EPC bandings is that there are more homes currently rated D to G than A to C, so much more direct investment is needed in energy efficiency to rectify that.

The Secretary of State talked about energy security, so does that mean that the Government have finally bought out China General Nuclear from the Sizewell C consortium? Talking about sovereignty, will he confirm that uranium imports are going to be needed to keep Sizewell C going? Is it still the intention to take a 20% stake, and does that mean funding capital of £6 billion or £7 billion towards Sizewell C, because there is still no clarity in today’s statement? On the myth about nuclear baseload, by the time Hinkley Point C comes on stream, seven of the eight existing nuclear power stations will have stopped operating, which proves there is no need for nuclear baseload whatsoever.

On wider energy policy, the Scottish carbon capture and storage cluster was the most advanced project, but it was still only classed as a reserve. Will the Government urgently review this classification, and make the Scottish CCS cluster a track 1 cluster to allow that investment to be released and for that project to go ahead? Pump storage hydro, as I have raised several times, could deliver about 3 GW of power by 2030. All that is needed is an electricity pricing mechanism—a cap and floor mechanism—so will the Government urgently review that and start these discussions?

Finally, we know about the oil and gas investment allowance. If we are going to have continued record investment in renewables, there should be a renewables investment allowance to encourage that, particularly for green hydrogen.

Yes, I can confirm that China has now been bought out of the deal on Sizewell. The money yesterday ensured that it is no longer involved in the development.

The hon. Gentleman asked about the future funding for Sizewell. He may be familiar with the new “regulatory asset base” approach to funding, which is built along similar lines to the contracts for difference that have been used so successfully for offshore wind power. That is how we will look to bring income to the project. I should also say that CfDs will now take place on an annualised basis, which will give those including Scottish clusters the opportunity to bid in as well.

I am always curious about the SNP’s approach to energy. As far as I can work out, it does not like the oil and gas industry—even though the industry employs thousands of its constituents—and it absolutely hates nuclear. I am not quite sure what it wants to do on non-windy days.

Cumberland has sites ready to go for new nuclear. It has expertise, interest and development companies for both small modular reactors and large-scale nuclear. Will the Secretary of State work with me and my hon. Friends the Members for Copeland (Trudy Harrison) and for Carlisle (John Stevenson) to bring Rolls-Royce SMR and UK European pressurised reactors 5 and 6 to Moorside?

I know that Cumberland has a tremendous amount of expertise and a lot more to offer. When Great British Nuclear launches in the new year, it will help to bring not just traditional Sizewell-style nuclear assets to this country, but the small modular reactors from Rolls-Royce and potentially other competitors.

I call the Chair of the Business, Energy and Industrial Strategy Committee.

I welcome the Secretary of State to his role. May I push him slightly further on the financing of Sizewell C? My understanding is that the Government are committed to spending 20% of the cost, and EDF 20% of the cost. That leaves 60% to be financed from the private sector, which I think means that up to £20 billion of financing still needs to be sourced. What will the Government do if they cannot find that from the private sector?

I thank the hon. Member for welcoming me to the Dispatch Box. As he will know as Chair of the Select Committee, we have been working on the Sizewell deal for quite some time and we got to the Government investment decision stage yesterday. Of course, we have been talking to potential financiers along with EDF and the French Government. We are confident about the level of interest, but I have no doubt that I will come to his Select Committee, along with my right hon. Friend the Minister for Climate, to discuss that in more detail soon.

I welcome the announcements on nuclear and specifically on Sizewell C. The Rolls-Royce scheme for modular nuclear seems very exciting, but we do need to get on with it. Does the Secretary of State have a view as to what year we will be starting the first project?

My hon. Friend will be pleased to hear that when I was at Sizewell yesterday, I was with leaders from EDF and the French Government—indeed, the French ambassador was there. Later in the day I spoke to my opposite number about ensuring that we can speed up co-operation on nuclear, as well as on things such as wind, and even on our interconnectors. I was going to say that the point of Great British Nuclear is to really put the acid under this, but I am sure that there is a much better nuclear comparison. It is really about ensuring that we get on with producing our new nuclear fleet a lot faster than has happened in the last few decades.

Will the Secretary of State confirm that, even with the additional money made available for home insulation, his officials have told him that the money falls short by tens of billions?

It is worth the House knowing that we have already put in £6.6 billion. We have announced another £6 billion, which will be spent in the period from 2025 to 2028. The £1 billion that I announced yesterday will cover hundreds of thousands of homes. Of course, it is typical of the Labour party to think that the only way in which this can ever be funded is by the taxpayer and that there are no other routes to market. Lots of homes will be improved by, for example, regulations on build, ensuring that the overall increase in improvements in EPCs comes not just through spending taxpayers’ cash.

It is a pleasure to welcome my constituency neighbour to his place as Secretary of State. He and the House will understand the importance of critical minerals to energy security. Could he outline his approach for the UK securing critical mineral supply to ensure that, over the longer term, we have energy security, particularly on things like lithium-ion batteries?

My hon. Friend and neighbour is absolutely right. Critical minerals are so important in securing the entire supply chain. Earlier I mentioned green lithium up in Teesside, which is part of that supply chain. The UK can have the first green lithium production in Europe because of Brexit and our ability, for example, to use more flexible rules that the Europeans cannot access at the moment to produce it, so that is a very good win. He is right about the strategy, and we have a strategy for the most important critical minerals.

On energy efficiency, will the Government introduce an inspection scheme for all rented accommodation to stop landlords from letting out properties that do not meet energy efficiency minimums?

Private landlords are already under an obligation to ensure that their properties reach certain standards. However, as the hon. Member may well know, the Government are consulting on raising that standard in line with the improvements that we would expect over a period of time, and we have already signalled that that would be likely to be to an EPC rating of C.

What is my right hon. Friend’s assessment of the risk to our country’s energy security this winter from possible disruption to the vital Norwegian gas pipeline, which will supply our country with approximately half of its gas needs this winter? Will he confirm that contingency plans are in place?

I am pleased to report that, notwithstanding things like terrorism or developments in the war in Ukraine, we have confidence about both our supply and European supply this winter. The weather has been better than might have been expected and gas supplies are full. I should also point out that the rough storage supply has been brought back online, which has increased our own storage by about 50%. I think that in all expected, imagined circumstances, we will be okay this winter.

This morning the Secretary of State and my Opposition Front-Bench colleagues have spent a long time tilting at windmills. Does he agree that when it comes to getting the right energy and keeping people warm this winter, all of us need to have more courage? Energy from waste could fulfil 20% of our energy needs. Good energy from waste schemes can heat the whole of a town or city, such as Sheffield. Is it not about time that we took energy from waste really seriously?

The reality of energy supply is that anyone who thinks there is a single silver bullet—I am not accusing the hon. Member of that at all—is typically wrong. Almost any energy source or supply has its vulnerabilities and its shortcomings. Certainly, energy from waste has its place—we are active in that space—as does ensuring that, for example, we are using energy as efficiently as possible. That is why we announced yesterday that there will be an £18 million campaign about doing straightforward things such as ensuring that the boiler flow is set correctly on people’s boilers.

Does my right hon. Friend agree that, as we pursue energy sovereignty, floating offshore wind in the Celtic sea can play a vital part? Will he confirm when we can expect an announcement on the floating offshore wind manufacturing investment scheme funding? To maximise the benefits to the communities around the Celtic sea, we need good port infrastructure to drive the project forward.

My hon. Friend is absolutely right. Floating offshore wind is an interesting development, and we are actively looking at it and working on it with a whole load of industry partners. She can expect some exciting information in this area in the future.

As a student of 16th-century literature, I enjoyed the Secretary of State’s Shakespearian rhetoric, but I am frankly staggered that he can possibly think that Sizewell C is cheaper—cheaper than what? It is massively costly. The RAB funding model basically means that consumers end up paying twice: once towards the cost of construction to lower the cost of borrowing, and again for more costly energy. The Secretary of State will know that no nuclear power station in the world has been built to time and to budget. He has asked what we do on windy days: may I suggest more interconnectors, far more solar—including ground-based solar—flexible energy demand systems, onshore wind, energy storage, tidals, and the mass energy efficiency and insulation programme that this Government are still failing to deliver?

One would think the Green party would welcome 43% of our power being renewable, done under a Conservative Government. On Sizewell C, she asks what it is cheaper than; I will tell her—it is cheaper than being subject to Putin’s invasion of Ukraine.

It took an international conflict to lessen and hopefully eliminate Europe’s dependency on a potential enemy, Russia. Can the Minister confirm that we will have no future dependency on China for our nuclear power stations?

I can certainly confirm that in the case of Sizewell C; as I mentioned, we are making sure that the Chinese element of that is no longer involved. We do not have a principled objection, apart from where issues of national security are concerned: clearly, energy provision is very much in our sights.

I welcome the Secretary of State to his place. Renewable energy is nine times cheaper than gas, and onshore wind is incredibly cheap and incredibly green, so we need to be clear: the Tory ban on onshore wind has kept bills unnecessarily high, and has also undermined energy security. Is it not time that the ban was fully scrapped and the interests of people struggling with their bills were put ahead of the political interests of nimby Tory Back Benchers?

It is good that the electorate know what they will be getting if they vote for the Labour party. With us, they will be getting local consent: if people locally are happy to see such power production, they will get it. With them, they will get it willy-nilly.

I want to correct the hon. Gentleman on one fact: the cost projections on new forms of energy supply show that offshore wind is the cheapest available in the next likely bidding round.

I warmly welcome my right hon. Friend’s focus on securing energy security domestically, but does he agree that that must happen alongside food security, not over the top of it? We have vast swathes of land being taken for solar farms, while warehouse and factory owners cannot install solar because the grid cannot take the power. What is being done to ensure that rooftop solar can happen?

My hon. Friend is absolutely right about rooftop solar; I have had it on my own house for the past 11 years, and once it is there, it just carries on producing power. We need to expand that, both domestically and on factory roofs. I will be looking at things like permitted development rights, which enable those panels to go up on top of roofs. There are currently limits to the size of the panels that can be put in place, and I think they are a fruitful source of additional power.

I welcome the Secretary of State to his place. According to what he has said, Sheffield must be getting some things right: we have been doing energy from waste for over 30 years, since I was council leader, and ITM Power, the leading green hydrogen company, is in my constituency.

Regarding nuclear, is it not important that we ensure a UK supply chain, which has not always happened? Rolls-Royce and SMRs are therefore really important, working with Sheffield Forgemasters, but Madhvani International is also prepared to put billions of pounds of development capital into developing Hitachi-based SMRs—which are already regulated in North America—working with Forgemasters and other Sheffield companies. I am pleased that the Secretary of State will meet me tomorrow to discuss the proposal in more detail, but in principle, I hope that he welcomes it.

I welcome the hon. Gentleman’s foresightedness in all the schemes that he mentioned. It is a shame that the last Government to invest in nuclear power was Margaret Thatcher’s Government, all the way back in the 1980s; yesterday brought that long drought to an end. As the energy Minister, my right hon. Friend the Member for Beverley and Holderness, has reminded me, we have already provided £210 million to Rolls-Royce for the small modular reactor programme. I wish both Sheffield and the rest of the country well in attracting some of this new technology, and the supply chain that goes with it, to their constituencies.

Land-based wind is a good, quick and relatively cheap way for the Government to achieve more on alternative energy and security of supply. Does my right hon. Friend therefore agree that the current partial ban on onshore wind is stifling growth, our march towards net zero, and our quest for security of supply?

I think a mixed provision of energy is extremely important—I have talked about solar, offshore and onshore wind, nuclear, and other sources. The answer is very simple: as has been set out in our energy review, the 10-point plan and elsewhere, where there is local consent, we will ensure that onshore wind can be part of that critical mix. It is a fairly simple principle, which the whole House should be able to unite behind, that local consent is important in these matters. That is the situation that exists, and will continue to exist.

The role that community renewable energy production could play is currently hampered by an unwieldy regulatory process. Will the Secretary of State bring forward amendments to the Energy Bill to empower community energy schemes to sell their power directly to local companies and customers, thereby also neatly slashing bills?

The hon. Gentleman makes a very good point. We are already doing everything we can to cut that regulatory burden, and my right hon. Friend the Member for Beverley and Holderness would be happy to take that conversation forward.

As my right hon. Friend has mentioned, the last time that a Government invested in new nuclear in this way was when my late father was at the Dispatch Box as Energy Minister in 1987. I remember very well the campaign to “Get more for your monergy”—as a nine-year-old boy, I even got to wear the T-shirt. To ensure that our constituents get more for their monergy, does it not make sense to break the link between gas prices and electricity prices? When will my right hon. Friend do that?

My hon. Friend’s late father clearly showed great foresight—it is a shame that it has taken all these years, via a 13-year Labour Administration, to do nothing at all on nuclear. I like the T-shirt that my hon. Friend’s father made him wear, and I agree with him on separating out those prices. At the moment the highest cost in electricity applies to everything, and we are actively looking at breaking that complex relationship.

I welcome the Secretary of State’s quote from Shakespeare, but if the bard were alive today, he would be writing either a comedy about the Government or a tragedy about their energy strategy. We have houses in my constituency being built with insufficient insulation and no solar panels, or solar panels on north-facing roofs. If onshore wind is indeed the cheapest source of energy generation currently, how is it that Warwickshire has no onshore wind turbines?

As I mentioned, the reference price shows that other forms of energy could be even cheaper. Until now, solar panels were not as effective on north-facing roofs, for example, but the hon. Gentleman is absolutely right that the technology is improving rapidly, with the result that we can install solar panels in more conditions than would otherwise have been available.

We need to recognise that developing our renewable mix of energy to 43% is a significant success—far more successful than other comparable nations—yet in these current weather circumstances, as people switch on their electric kettles during tonight’s football match, wind will only generate 2% of that energy mix. That underlines the importance of my right hon. Friend’s statement, so will he provide further detail and timescales regarding when small and advanced modular reactors will be possible? Wales has two of the preferred development sites, but does my right hon. Friend further agree that the Welsh Government need to be supportive of those projects to make them a reality?

My right hon. Friend is right. In Wales and Scotland, the devolved Administrations need to support new nuclear provision to provide energy security for their constituents. He talked about 43.1% of our energy coming from renewable power. Opposition Members said that it could not be done, but it has been done ahead of time and we will only go further.

I thank the Secretary of State for his answers. In BEIS questions today, he referred to 10,000 highly skilled jobs and securing UK energy security, with British energy used for British homes. Some 6 million of those homes can be powered by the Sizewell C nuclear plant. Has the Secretary of State come to an assessment of how these decisions will have an impact on energy security for the devolved institutions? What steps will be taken to ensure that Northern Ireland, which I come from and represent, plays a part in securing energy independence?

The hon. Gentleman is right that a single nuclear power station can power 6 million homes, whereas a modular reactor can power perhaps 1.5 million homes. As a result of interconnectors, that power—when it is generated in Great Britain—helps Northern Ireland and all the devolved Administrations around the country. He is on the right track; that is the kind of energy independence that I mentioned in my statement.

The Secretary of State will be aware of analysis from the Climate Change Committee that states that we will not get to net zero in this country without carbon capture and storage. I therefore welcome his commitment to helping to liberate private investment in carbon capture and storage and other technologies. The Scottish cluster alone is poised to have billions of dollars-worth of investment. While he is pondering the acceleration of that project, will he consider joining me on a visit to the St Fergus gas terminal in my constituency? It has not only carbon capture and storage, but blue hydrogen, sustainable aviation fuel and net zero thermal power generation, and grid capacity and resilience improvements are being made in and around it.

My hon. Friend is right about the importance of private investment in carbon capture, utilisation and storage. The Energy Bill will look to unlock that private investment.

I welcome the Secretary of State to his place. Global gas prices have been at record highs. That has been caused by Putin’s illegal war in Ukraine and it has been a problem for the whole of Europe, so I welcome what the Government have done to protect my constituents from this impact through our energy price guarantee. Does he agree that the long-term solution to ensure stable and lower prices is to have diverse sources of British energy providing the power to our homes and businesses?

My hon. Friend is right. We need energy independence, security and sovereignty. That is what we are building in co-operation with our partners, with interconnectors, so that we are never again subject to the whims of a dictator from the east, as has happened this year.

I welcome many of my right hon. Friend’s steps to ensure energy security, particularly in the nuclear sector. He talks a great deal about Sizewell C; Warrington is the home of the National Nuclear Laboratory, so the decision will secure many of the 2,500 jobs that nuclear generates in Warrington. The north-west leads the way in carbon capture and storage and hydrogen technology with HyNet, so will he outline how hydrogen can play an important part in large industry energy generation for the future?

My hon. Friend is right about the role of hydrogen. I know from my time as Secretary of State for Transport how important that will be, particularly for transport in the much larger category of goods vehicles, buses, coaches, marine vessels and aviation. This is not just about the jobs in nuclear, which the Sizewell decision and Great British Nuclear will help, but about the development in hydrogen power. In particular, those hubs with great expertise will be tremendously important, and this Government fully back them.

Investment in energy-intensive industries such as ceramics must also be a key part in reducing our overall energy consumption. Will my right hon. Friend look at what more can be done to invest in those key manufacturing sectors not only to reduce that energy dependence, but to reduce costs and support jobs in places such as Stoke-on-Trent?

The brilliant industries—particularly ceramics—in my hon. Friend’s constituency have been badly impacted by Putin’s war. The energy bill relief scheme has helped, and such things as the scheme for energy-intensive industries will assist, too. Ultimately, this comes to the point of today’s statement: energy independence, with low-cost and affordable energy, is the way forward not just for domestic users, but businesses such as those in my hon. Friend’s constituency.

Bill Presented

Elections (Proportional Representation) Bill

Presentation and First Reading (Standing Order No. 57)

Cat Smith presented a Bill to introduce a system of proportional representation for Parliamentary elections, for elections for directly-elected mayors in England, for local authority elections in England and for police and crime commissioner elections in England and Wales.

Bill read the First time; to be read a Second time on Friday 20 January 2023, and to be printed (Bill 201).