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HS2: Electricity Supply

Volume 796: debated on Tuesday 26 February 2019


Asked by

To ask Her Majesty’s Government whether HS2 Ltd will fulfil the requirements of public procurement regulations by obtaining its electricity supply through transparent and competitive tendering; and if so, how.

I beg leave to ask the Question in my name on the Order Paper, and refer to my interests in the register.

My Lords, HS2 will identify a suitable partner to supply electricity for the operation of the railway through a transparent and competitive process, in compliance with the Utilities Contracts Regulations 2016. HS2 Ltd is in the process of undertaking a strategic assessment of electricity sourcing options, and will produce a fully costed business case, which will then form the basis of a recommendation to the Department for Transport.

I thank my noble friend for that encouraging reply. HS2 will have a gargantuan appetite for electricity—about 3 terawatt hours per year, or 1% of the entire UK electricity demand—costing several hundred million pounds per year. She will be aware of a recent report from KPMG to HS2 Ltd, which recommended that HS2 do a sweetheart deal with the wind industry to build new wind farms specifically to supply the railway, though not necessarily along the line, with a hidden subsidy, the cost of which would be passed on to the traveller and/or the taxpayer. Can she confirm that this would break the rules on public procurement?

I thank my noble friend for his question and I share his desire to ensure good value for money for taxpayers and indeed passengers. The advice given in the KPMG report is that while the wholesale price for electricity is forecast to increase over the long term, the price of renewable energy is coming down, so it recommended signing a long-term contract for the supply of renewable electricity. I should reiterate that the report represents only advice to HS2. No decision has been made and, before any contract is signed, HS2 will need to present the proposed energy strategy to the DfT. Whatever strategy is agreed, HS2 Ltd will be required to demonstrate that it has complied with the Utilities Contracts Regulations 2016.

My Lords, this Question highlights the fact that HS2 will be an electrified railway, which is much more environmentally friendly and cheaper to operate than a diesel line. The Government have recently abandoned or deferred major mainline railway electrification projects. Will they now restore those projects and put them on the same footing, electrification-wise, as HS2? Further, will they confirm that they will proceed with HS2 north of Birmingham to Manchester and Leeds?

My Lords, we have had to take some difficult decisions on electrification, which we are bringing forward where it is in the interests of passengers. I confirm that we are absolutely committed to continuing HS2 north of Birmingham. It is going to bring great connectivity to our great cities of the north.

My Lords, there is growing hope and, dare I say, even expectation that the Government will eventually scrap this hundred-billion pound vanity project and spend the money on railways throughout the rest of the country. In the meantime, money is haemorrhaging away and the lives of people along the route are being ruined by this scheme. Can I urge the Minister to try to persuade her colleagues to come to a decision and make an announcement as soon as they possibly can?

My Lords, I am sorry to dash my noble friend’s hopes but we remain committed to phases 1, 2a and 2b of HS2. As I have said, it will improve connectivity across our country. Our railways are full, with the doubling of passenger numbers since privatisation, and it is essential that we build a new line to allow space on other rail lines and thus improve things for passengers.

My Lords, I am pleased to hear the Government’s continued support for HS2, but the department which failed to set up a contract to deliver a few extra ferries is unlikely to inspire public confidence in the management of big projects. How are the Government ensuring that every aspect of the HS2 costings is re-examined and questioned so that we can be confident that it is good value for money?

My Lords, I agree with the noble Baroness that we have to ensure that the project is good value, because £55.7 billion is a lot of money. The full business case is planned for later this year, and that will reassess the phase 1 scheme against the standard business-case criteria. That business case will provide an updated benefit-cost ratio for the phase 1 scheme.

My Lords, when are the Government going to kill this white elephant off and switch the funding to rail schemes around the country that are starved of investment?

My Lords, if I have not made it clear already, we are committed to HS2. As well as the £55.7 billion investment we are making in HS2, we are spending record amounts on the rest of our railways— £48 billion over the next five years.

My Lords, a lot of people understand that HS2 is a complete folly. Having said that, if it is going to go ahead, the Wildlife Trusts have had an excellent idea to give the project at least some green credentials. It is that green wildlife spaces should be set up, reaching a mile on either side of the railway, with green bridges to not only enable wildlife to travel through Britain but also to provide recreational opportunities for people.

I agree with the noble Baroness that this project will help to improve the environmental record of our travel, by ensuring that people travel using high-speed rail rather than roads. That will be a benefit. I have seen the plans for the green spaces and green bridges. HS2 is committed to environmentally friendly practices including woodland areas, and is considering those plans carefully.

Does the Minister share my concern or perhaps she even recognises the inevitable: many sections of the House are following a long tradition of this House in opposing the building of railways anywhere and at any time. beginning with the London to Birmingham railway in 1830? Can she assure us that this investment, which is essential to the people of the Midlands, will go ahead, especially in view of the fact that there never seems to be anything like the same level of objection to hugely expensive schemes such as Crossrail in London—which I also support? They appear to go ahead much more easily than anything which might benefit the Midlands.

My Lords, the last time we built new rail links to the centres of our great northern cities Queen Victoria was on the throne, and I entirely agree that it is high time we built more. When HS2 is up and running, by 2033, up to 18 trains will run each hour, carrying up to 1,100 passengers each and serving 100 million passengers each year. This investment will continue.