The Bill is a crucial piece of legislation for delivering a cheaper, cleaner energy system and increasing investment in clean energies. As the new Department is named the Department for Energy Security and Net Zero, one hopes it will deliver on both. I do not need to rehearse the challenges we face in respect of how being overly reliant on imported gas has created higher energy prices. Much more needs to be rapidly done to improve our energy security. If we create the right legislative framework, and invest in renewable and sustainable energy supplies, we should ensure that we also achieve the goal of moving towards net zero.
There is much to welcome in the amendments from the other place. In particular, I wish to speak to clauses 272 and 273, formerly in the Local Electricity Bill, which are backed by 318 MPs, including 125 Conservatives. These measures seek to enable community groups to sell electricity to local customers. It is still bewildering to me, as someone who lives somewhere sunny, windy and with a huge tide, why this has not progressed sooner. Clause 272 sets up a community and smaller-scale electricity export guarantee scheme to provide a guaranteed income for the electricity from small-scale renewable energy generators with a capacity below 5 MW. Surely, with dramatically rising energy prices and a system still reliant on fossil fuel imports, new local, secure, low-carbon generation must be desirable.
Clause 273 sets up a community and smaller-scale electricity suppliers services scheme, which would enable them to sell the electricity generated to the local community if they wish to do so. That would facilitate a community energy tariff that can be offered to consumers local to the site. Locally generated electricity would reduce our dependence on imported energy and increase the resilience of our domestic energy supply. It could help cut bills and save emissions. There is huge support for these clauses across this House, and I hope that Ministers will
ensure they remain in this Bill. Ministers have previously opposed them on the basis that they amount to a subsidy. However, that would be the case only if the guaranteed price were many times the prices of other sources, but that is not what these clauses mean, with a suggested rate of about 5p to 10p per unit.
Bizarrely, these same Ministers are still happy to subsidise the burning of trees for woody biomass, creating one of the biggest emitters of carbon dioxide in the country. We are subsidising that to the tune of £1.7 million per day. Even advisors to the provider of this plant have detailed that it should
“reassess its criteria for determining carbon neutrality”.
We are seemingly keen to subsidise this polluting form of energy at a time when I am sure we are working towards net zero, yet there seems to be far less subsidy for some of the genuine renewables that we could make use of, for instance right here in the Celtic sea—I declare an interest as chair of the Celtic sea all-party group. But this year’s contracts for difference auction is expected to deliver less than half the renewable capacity we need to hit our 2030 offshore wind target, all due to an administrative strike price not keeping pace with rising supply chain and financing costs and a Department that said that it did not believe the industry’s figures.
As the Crown Estate gets ready to launch its next leasing round in the Celtic sea, aiming to catch 4 GW of floating offshore wind, I hope that we will be able to help get these floating offshore wind turbines out to sea rather than subsidise the burning of trees to secure our future energy supply. It is inconsistencies such as this that make me support new clause 271, which would place a duty on Ofgem to consider net zero. Investment and subsidy decisions would hopefully then ensure that the true environmental impacts of the energy produced were considered.
Clause 204, on improving energy efficiency standards in our homes, is hard to argue with. However, the practicalities of the issue have already seen long-term landlords change to short-term holiday lets in locations such as my beautiful North Devon constituency. We need to ensure that any move to improve energy efficiency applies to short-term holiday lets as well long-term rentals —we still use energy and emit CO2 when we are on holiday.
However, I have concerns about a blanket imposition. In rural and coastal Britain, our housing stock is older and draughtier, and it is harder to bring up to the standards of newer homes given planning restrictions. We need to better understand rurality. I will support any amendments that my right hon. Friend the Member for Camborne and Redruth (George Eustice) tables, as it seems bewildering to me that we are requiring all off-grid properties to adopt air source or ground source heat pumps when we could enable those with oil boilers to convert to hydrogenated vegetable oil at a fraction of the cost. The cost of such fuels is currently prohibitively expensive, but given that the Government have long recognised the value of renewable fuels, such as hydrotreated vegetable oil in the transport sector through the renewable transport fuel obligation, surely it is possible to devise a similar incentive mechanism, extended to the use of renewable fuels in domestic boilers for off gas grid properties. This could be achieved by some tweaks to clause 10, in part 3 of the Bill.
We should be able to support community energy generation given the abundance of renewable energy sources, particularly in the rural south-west. We must focus scarce subsidies on fuels that are truly renewable and work to harness the wind in the Celtic sea, which, in turn, will support the UK’s longer-term energy security strategy.
There is much to commend in the Bill, but I hope that Ministers will look favourably at these amendments and recognise that, while energy security is vital, we also need to work towards net zero. Frankly, though, some of the current subsidies risk delivering the opposite outcome.
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