For once, I find myself in the unusual position of debating legislation that I do not intend to reject out of hand. I have to admit that I broadly welcome most of the measures in the Bill, particularly those relating to carbon capture and storage and hydrogen models. That said, I must put on record my objection to all the comments that have been made about nuclear. Nuclear is the only energy technology that has become more expensive rather than cheaper over the years, so talk of its making our bills less expensive is collective madness. We need to move away from that. As for the talk about small modular reactors, no design has even been approved for their implementation yet. I do not know how the competition can be judged when there is no approved design for SMRs, and I understand that the process that is going on will take at least another 18 months.
Another aspect of the Bill that I cannot get my head round is the fact that the so- called revising Chamber was deemed to be the right place in which to introduce it.
That seems counterintuitive to me, but I will say to the Secretary of State that, if the other place was indeed deemed most appropriate for the purpose, the House should trust the five amendments that were made there and recommend that they should remain in the Bill. Let me say for the record that I support them.
The amendment that would prevent any new coalmines from being opened by the Coal Authority or its successors makes sense if we are serious about net zero. We cannot have the hypocrisy of lecturing developing countries about the use of coal while considering extracting coal ourselves. We cannot have the hypocrisy of Tory MPs’ decrying Germany for using coal while at the same time supporting the new Cumbrian coalmine. We need to end the pretence of a zero emission coalmine that ignores the emissions from the carbon embedded in the coal that is about to be burnt, and we need to end the hypocrisy of arguing for indigenous coal for steel coking in the UK when the coal is generally not suitable for the purpose and 84% of it will be exported to be burnt elsewhere.
As for the amendment to ensure that meeting the UK’s net zero targets becomes a specific part of Ofgem’s general responsibilities, that is just plain common sense. We have heard a number of interventions in support of it, and indeed it is one of the recommendations in the Skidmore review, as well as being called for by representatives of the wider industry including Energy UK, RenewableUK, the Climate Change Committee and the National Infrastructure Commission, and groups such as the Green Alliance. It is logical to assume that, if the Government object to Ofgem’s having a net zero mandate, they are signalling that they are not serious about doing everything possible to meet the net zero target—and when are they ever going to publish the long-delayed strategy and policy statement for Ofgem? For too long they have seemed to suggest that Ofgem should have responsibility for policy considerations when awkward questions arise, when it is clearly their responsibility to set policy decisions for Ofgem in that strategy and policy statement.
For years I have been going on about the unfair transmission grid charging system which penalises Scottish sites where the best load factor and wind resource can be found. As has been re-confirmed by the Green Alliance, the current system, overseen by Ofgem, favours electricity coming from Europe rather than wind farms built in the UK’s windiest areas. On average, according to the alliance, EU electricity generators paid 16 times less in transmission charges to send their energy to England last year than the cost of bringing energy down from Scotland, and Scottish generators are now at a significant disadvantage in comparison with sites in France, the Netherlands, Belgium, Germany, Denmark and Norway. What kind of perverse logic is that?
Worse still, National Grid ESO has confirmed that £4.6 billion was paid in constraint payments last year, mainly owing to the lack of grid capacity between Scotland and England. If ever there was an example of lack of strategy and forward thinking between the Government and the regulator, this is it. Paying wind farm developers to stop generating because of a lack of grid capacity, while either paying fossil fuel generators to ramp up gas generation to meet the demand or
importing from the continent at the same time, is madness. Those constraint payments could easily have covered the cost of grid upgrades.
As well as the need for grid build-out to facilitate the renewable energy targets, there is a need for the Government—if they want to deploy renewable energy—to listen to what the industry is saying about the pressures of inflation and how it will struggle to meet the strike rates that have been suggested for allocation round 5. Indeed, some of the biggest developers mentioned by the Secretary of State are struggling to deliver on their AR4 commitments. We need to learn from the Spanish auction, which was a complete failure, to listen to industry and to ensure that that failure is not repeated as we try to deploy renewable energy as quickly as possible.
The Government’s own offshore wind champion has pointed out that they will be well short of the 2030 target of 50 GW of offshore wind. The Government should consider revising the “first come, first served” approach and the ability to hold on to grid consents, which is a prize that companies seek to retain. We need to move away from that system and allow access to the grid for companies that can deploy quickly. The Government rightly talk of speeding up consent processes in England and Wales through the planning system, but we must ensure that Scotland is not left behind. The Scottish Government have made contact with his Department. I am sure he understands that, while Scottish Ministers have responsibility for signing off planning consent for major infrastructure projects, the regulations themselves are reserved to Westminster under section 36 of the Electricity Act 1989. The two Governments need to work together to revise those regulations so that Scotland is not left behind.
Several bodies, including Energy UK and the Climate Change Committee, have called on the Government to apply a net zero test to all policy, regulatory, spending and taxation decisions. I support that, because I know that we need to move away from silo working and ensure that there is a joined-up net zero policy across all Government Departments. I also think that the UK Government should learn from the Scottish Government’s establishment of a Just Transition Commission to place fairness and long-term job creation and transfer at the forefront of net zero, and I call on them once more to match the Scottish Government’s £500 million just transition funding.
I also support the amendment on community energy. As a co-sponsor of the Local Electricity Bill, I support the suggested change to provide a framework to support the growth of a community and smaller-scale electricity export guarantee scheme. It has already been supported by Community Energy Scotland, and 318 MPs now support the Bill, including 125 Back-Bench Conservatives —more than enough to win a vote in the House. The concept is also backed by more than 110 local authorities—including my own, East Ayrshire Council—and more than 80 national organisations.
The organisation Power for People deserves the most credit for getting the campaign to this stage. It is estimated that community energy generation could grow between 12 and 20-fold in size over a decade, which could mean up to 10% of electricity being generated by community-owned projects. That would facilitate additional investment providing returns for communities, building better network
resilience with small schemes scattered across the grid—and, of course, that is far better value for money than the £70 billion or so for two large-scale nuclear power stations. In 2021, according to Power for People, community energy groups spent more than half a million pounds on energy efficiency upgrades, helping 21,000 people to reduce their energy bills, while nearly 60,000 individuals were engaged in energy efficiency initiatives. This means reducing energy demand in the entire system. It is clear that the reinvestment of returns by community schemes is a virtuous circle.
A policy that was successful in the past was the feed-in tariff, which secured the deployment of small-scale generation projects, particularly small-scale hydro projects in Scotland. Those projects work: they are proven technology, and last for decades. That is why we need pricing certainty for such generation. Some form of export price guarantee could reinvigorate hydro schemes around the 5 MW capacity, as delivered by companies across the Scottish highlands, such as Green Highland Renewables. It makes no sense for them to have reached maximum efficiency and expertise in terms of designers and contracts, but then to have the rug pulled from under their feet and that expertise lost.
On that subject, I want to put on record again the plea to find a way forward for pumped storage hydropower. I was disappointed that the Minister for Nuclear and Networks, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), said at the Scottish Affairs Committee that that would not happen any time soon. That technology can be deployed right now. It is proven technology that can be deployed fast, and we should be moving forward on it.
On energy efficiency, the Secretary of State was again boasting that the stock of properties rated EPC or above has increased from 14% to 47% since 2010. Yes, that is progress, but it is progress based on addressing the easiest homes first. Clearly, if only 33% of stock has been addressed in 13 years, the target for completing the rest by the target date of 2035 will not be met.