My Lords, I declare my interest as a director of Aldustria Ltd, which is into battery storage. We absolutely have an energy crisis at the moment, and it is multidimensional. The statistic that struck me most was that, in October, we can expect average—I repeat, average—energy household bills to approach £3,000. That level will, I suspect, affect some of the decisions that we in this House will make, let alone those who are far less well-off than we are privileged to be as Members of this House.
A bit like inflation, where the risk is that it becomes endemic, as the noble Lord, Lord Forsyth, said, an energy price increase at that level will not go down quickly. Through the aggression of Russia, the situation in Ukraine means that the chess pieces on the energy board are not going to stay put; they are going to move around and, if anything, get worse over the next few years. Our main concern has to be the effects of that on households and the broader economy. As we have seen, those with prepayment meters—their only source of energy, in many ways—have already stopped putting finance into those meters. That is a leading indicator of where we are going in this crisis.
I very much welcome that we have in the Queen’s Speech, and coming down the legislative road, the energy security Bill. I am sure there are some parts of that that are really important, not least such things as the future systems operator—it all sounds very technical—but we absolutely need a revived strategic approach to our energy networks. Already, getting access to the grid, whether it is for renewables or for batteries, is extremely difficult. I just do not see a pathway through in the short term, whereby we can bring many of those renewable resources on board, let alone energy storage as well, which makes some of those renewables work.
Back in November 2020, we had the Government’s Ten Point Plan for a Green Industrial Revolution, and just before we finished the last Session of Parliament we had the energy security strategy. To me, there was a big difference between the two, and it was at point 7 in the green industrial revolution, on the very tedious subject of energy efficiency. Energy efficiency is really boring; it is all about bringing down the demand for energy. I sometimes think that, in energy policy-making in the Government, we have gone back to the thinking of the Central Electricity Generating Board of the 1960s: there is going to be an energy crisis, so build, build, build. Of course, we have to do that, but what we need to do as well—and we are smart enough and we have the systems to do it these days—is manage demand.
I was brought up as an economist, where you dealt with supply and you dealt with demand—you dealt with both. We seem to have forgotten that entirely. It is in the area of heat and buildings, where the Government have a strategy, that we need to get energy efficiency right.
The Climate Change Committee was mentioned earlier in the debate, and I shall quote its thoughts on the Heat and Buildings Strategy in its report that came out earlier this year, I think in March:
“plans are not yet comprehensive or complete—
it is talking in its usual very restrained way—
“and significant delivery risks remain”
across the strategy. My absolutely fundamental question to the Minister is whether the energy security Bill will bring back that other half of the economy—demand, as opposed to supply. I would like him to answer that key question.
The only other questions I would ask are these. When do the Government predict that we will finally manage to decouple electricity prices from gas prices? That has to be an absolute target, to get us out of these sorts of things in the long term. Finally, coming down to the micro, what are the Government going to do particularly around those consumers on prepayment meters who will, in many ways, be discriminated against in the restricted strategies that we already have to help consumers with their energy bills?
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