My Lords, with the leave of the House, as well as moving that this House do agree with the Commons in their amendment, I will also speak to the other Commons amendments. I am pleased to bring the Energy Bill back to this House, following on from the many hours of debate that we had during its parliamentary stages in this place. The Bill is essential to the transformation of our energy system and will leverage private investment in clean technologies. It will reform our energy system so that it is fit for the future, and it contains essential provisions for ensuring the safety, security and resilience of the UK’s energy system.
The Government have listened carefully to the points raised, both in this House and in the other place, and we tabled various amendments in the other place to address many of these issues. The amendments have been gathered into three groups. First, there are the amendments making changes to the Bill in response to concerns raised across the House and where we have overturned lost votes. Secondly, there are amendments where we have introduced new government policy. Thirdly, there are amendments addressing minor and technical amendments made to the Bill. I wrote to
noble Lords about this in advance of the debate, and I am grateful for the positive engagement that I have received from across the House.
I will speak first to the amendments in the first group, tabled following constructive engagement with both Houses. First, on the amendment on Ofgem’s duties, no doubt the noble Baroness, Lady Hayman, will be pleased about this—and I am grateful to her for her amendments on Report that sought to include the Government’s net-zero targets within Ofgem’s duties. The Government have now tabled a revised version of the noble Baroness’s amendment to ensure that it would not impact the hierarchy and intended effect of Ofgem’s duties, but very much in the spirit of the original amendment. The revised provision amends Ofgem’s existing duty to consider a reduction in greenhouse gases by making specific reference to the net-zero targets and carbon budgets in the Climate Change Act 2008. This reaffirms the Government’s commitment and mandate in achieving our net-zero targets and ensures that Ofgem’s role in net zero is clear.
I turn to the amendments to the hydrogen levy provisions. The Government have included these provisions following consideration of the concerns raised by colleagues in both Houses, particularly the Labour Front Bench. Following careful analysis of the implications, these amendments are similar in intent to an amendment made on Report in this House, but they help to ensure that the provisions work in a way that is practical. Specifically, they remove provisions that enable the levy to be imposed on energy suppliers in Great Britain, ensuring that within Great Britain the levy could be placed only on gas shippers. In the case of Northern Ireland, the amendments are intended to ensure that only gas supply licence holders who engage in gas shipping activities can be subject to the levy. This reflects the different approach to the licensing of gas shipping across Great Britain and Northern Ireland. The revised legislation provides a fairer approach to funding hydrogen, placing the charge higher up the supply chain, with the potential for costs to be spread to sectors expected to benefit most from early hydrogen deployment.
Finally, I remind the House that the Bill will not impose a levy on gas shippers. Instead, it will enable government to introduce such a levy through secondary legislation. Any decision to do so would take into account all relevant considerations, including the affordability of energy bills. The Government will hold a public consultation as usual, before laying regulations introducing the levy.
I turn to amendments on renewable liquid heating fuel. As the recent biomass strategy made clear, such fuels will have a critical role to play in decarbonising our economy. We recognise that these fuels have the potential to play an important role in decarbonising heat in those off-grid properties that are not suited to electric heating. I thank the noble Lord, Lord Berkeley, for his amendment and comments on Report on this issue. I am pleased to confirm that we will explore the potential of these fuels for heat by issuing a consultation within 12 months, and we are taking powers in the Bill to support the use of these fuels in heat in future. This amendment would provide government with the powers
to introduce, again by regulation, measures that would impose obligations on heating fuel suppliers to supply specified amounts of renewable liquid heating fuel within specified periods. The Government also commit to consult specifically with the Scottish Government when consulting on the role of renewable liquid fuels in heating buildings off the gas grid and the implementation of a renewable liquid heating fuel obligation. The Government will look to legislate when parliamentary time allows to give statutory force to this consultation requirement.
Amendments 165 and 165A on sustainable aviation fuel commit the Government to publishing a consultation on the options for designing and implementing a revenue certainty scheme for sustainable aviation fuel within six months of the Bill being passed. The Government are also introducing a sustainable aviation fuel mandate from 2025 that will do the heavy lifting to close the cost gap between jet kerosene and sustainable aviation fuel by providing price support in the form of tradable certificates. These policies, along with the £165 million advanced fuels fund, will help to deliver our ambition of having at least five commercial-scale sustainable aviation fuel plants under construction in the UK by 2025.
I turn to community energy. The Government recognise that such projects can have real benefits for the communities in which they are based, and we are keen to ensure that they deliver value for money for consumers. That is why earlier this summer we launched a new £10 million community energy fund, which expands on the success of the previous rural community energy fund to enable both rural and urban communities across England to access grant funding to develop local renewable energy projects for investment. Alongside the proposed fund, we are committing to publishing an annual report and to consulting on the barriers the sector faces when developing projects.
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I turn to the amendment that would remove Clause 270 on the prohibition of coal mines, inserted into the Bill by this House. I know the House feels strongly about this matter, but we have considered this clause in detail. We agree that unabated coal has no role in our future power generation mix. The share of electricity generated by coal has already declined sharply, from almost 40% in 2012 to around 2% in 2021, and we do not expect any electricity to be generated from coal after 2024. Although coal will soon cease to be part of our electricity system, there may continue to be domestic demand for it, in industries such as steel and cement and for things such as heritage railways, which can be met domestically. Prohibiting all coal extraction would deny access to domestic coal reserves for these few legacy industries. We do not believe that now is the right time to take such a step.
I turn now to the amendment that would remove Clause 204, which would place a duty on the Government to publish a plan for delivering specific targets on low-carbon heat and energy-efficient homes and non-domestic properties, and higher standards on new homes. We have carefully considered this clause but do not believe it would help to deliver our commitments to improve the energy performance of buildings. Several
action plans that relate to this topic have already been produced, such as the Heat and Buildings Strategy, the net zero strategy and the net zero growth plan. Another plan would simply duplicate many of these previous efforts. The important thing now is to concentrate on delivery. Therefore, we do not believe that this clause is necessary.
I turn to the amendments related to devolution. I am pleased to update the House that the Government have reached an agreement with the Scottish Government to amend the Bill to secure their support for a legislative consent Motion in the Scottish Parliament. This comprehensive set of amendments strengthens the Bill’s consultation provisions and requires the Secretary of State to seek the consent of devolved Ministers before exercising certain powers under Clauses 2, 3 and 293. However, the Government are disappointed that the Welsh Government are currently not supporting a legislative consent Motion for the Bill in the Senedd, which is considering the Bill today. The Government have extended the amendments agreed with the Scottish Government to apply in Wales and Northern Ireland, where appropriate and in good faith. This demonstrates our commitment to continue to work closely with all devolved Governments. I beg to move.