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Clean Energy: Investment

Volume 826: debated on Wednesday 14 December 2022


Asked by

To ask His Majesty’s Government how they are working across departmental boundaries to ensure that the effectiveness of investments in clean energy is being maximised.

Driving investment into UK clean energy is a priority for this Government to improve energy security, reduce emissions and boost jobs and growth across the country. We are backing our targets and ambitions with policy and targeted funding. Since March 2021, the Government have committed £30 billion of investment in domestic green policies. The policies are already expected to drive an unprecedented £100 billion of private investment and to support 480,000 jobs by 2030.

I thank the Minister for his response. There are a number of supplementary questions I could ask around the lack of joined-up government on clean energy investments, but the one on which I am keen to hear more is what we will do with excess clean electricity to have maximum effect for reaching our environmental goals. Specifically, how will we use excess electricity to create hydrogen for fertilisers? We talk a lot about hydrogen being used in the home for heating, which I do not think is a good idea, or hydrogen for transport, but hydrogen has a use in fertiliser production. If Defra and BEIS work together, we could become at the forefront of that industry of clean, green, fertiliser production at a time when prices are sky-high and we need alternatives.

The noble Baroness makes a very good point. One of the policy challenges we will have is how to use some of what she refers to as excess clean energy. With renewables being intermittent, there are times with large amounts of available spare electricity and other times when there is not enough. Hydrogen could clearly play a key role in that, and one of the uses of that excess electricity is to produce clean hydrogen.

My Lords, this year’s Climate Change Committee report to Parliament on climate adaptation found that planning for global warming levels of 2 degrees centigrade was not happening, and that the UK’s energy, water, digital and transport providers are struggling to take account of climate-related risks to connected infrastructure systems, which could cause cascading failures. When do the Government intend to act on the priorities identified by the Climate Change Committee, particularly in addressing risks to critical energy infrastructure?

Of course, we liaise very closely with the Climate Change Committee. There is a huge amount of investment going into energy infrastructure. I have referred in the House before to the amount of change that will happen in our energy infrastructure as we diversify the grid. My noble friend makes a good point.

Does the noble Lord agree that cleaning up energy is just as important as clean energy? As he knows, I have an interest in carbon capture and storage. So many times over the past few years has the investment community been marched up to the top of the hill and then disbanded. Does he agree with me that a strong signal needs to be given to that community that carbon capture, utilisation and storage is a key part, going forward, of clean energy?

Indeed, I agree with the noble Baroness, which is why we are supporting the deployment of CCUS with our £1 billion infrastructure fund.

My Lords, one of the main failures of departmental co-operation is the paucity of recharging points for EVs in rural areas. There are absolute wastelands. Is the Minister’s department, which is in charge of decarbonisation, really pushing the Department for Transport to makes sure that the distribution of charging points is effective, large and in rural areas?

As the noble Lord correctly says, the rolling out of charging points is the responsibility of the DfT, but I know that it has an extensive programme of grant support. Clearly some local authorities perform better than others but, if we are to continue the rollout of electric cars, an extensive network of charging points is vital.

My Lords, I declare my interests as set out in the register. I ask the Minister to confirm that he agrees that clean energy includes nuclear energy, and that the failure of wind and solar power to make any real contribution in current extremely cold conditions strengthens the case to accelerate plans to bring forward commercial schemes to deploy SMR technologies, including Japan’s high-temperature gas-cooled reactor technology, whose demonstrator has been running safely for more than 10 years.

Without getting into supporting particular types of technology, I certainly agree with my noble friend that the rollout of nuclear is particularly important. It offers large-scale carbon-free electricity, which is why we recently announced our investment in Sizewell C.

My Lords, what assessment have the Government made of their ability to meet the 2030 offshore wind targets of 50 gigawatts? There are a number of challenges here: the change in macroeconomic conditions; higher interest rates; and competition in global supply chains.

The noble Lord makes a very good point. We have been particularly successful in rolling out offshore wind in this country. I have made the point before that we have by far the largest rollout in Europe. In fact, so successful have we been that the rest of Europe is now trying to copy us, which of course will challenge supply chains. But we are working very closely with all the suppliers, many of which are expanding their production in the UK to make sure that we can successfully meet our ambitious target.

My Lords, the Government announced earlier this year that their main form of renewable investment—contracts for difference—would move to more frequent allocation rounds, beginning next year. This is welcome, as we have said; but what consideration have the Government given to complementing this with the voluntary contracts for difference process for existing generators, which would grant generators longer-term revenue certainty and safeguard consumers from further price rises?

The noble Baroness is right that the contracts for difference scheme has been extremely successful. Many of the generators are now paying back into the system because the strike price is below the market price. We will roll out as many additional CfD schemes as we can in future years.

My Lords, there was talk of the Government planning to open a heat pump factory, which sounded like an extremely good idea because at the moment we import them all. I am curious if that is going to happen. Would that not have been a better plan than opening a coal mine that produces coking coal that no one in the UK is going to use and which we will probably have trouble selling anyway?

The noble Baroness knows how much I hate to disagree with her but as usual, of course, she is wrong. I am not going to get into the business of the Cumbria mine but of course there is a market for the coking coal; it is not for energy production. She is also wrong about heat pump manufacture. There are a number of heat pump manufacturers in the UK. There is a big ground-source manufacturer in Cornwall and air-source heat pump manufacturers in Scotland, but we need more of them. That is why we have an investment competition running whereby the Government will give grant aid to help more heat pump manufacturers to be installed into the UK.

My Lords, I am at it again, as I was yesterday, on tidal power. Does my noble friend agree that tidal power is totally predictable and entirely independent of the vagaries of the weather? Will he do his best to maximise both the development and the implementation of tidal power?

My noble friend is indeed passionate on this subject and raises it many times. It is an important contributor, as I said, in the latest CfD round that the noble Baroness, Lady Blake, referred to. For the first time ever, we allowed some CfD investments in tidal power.

My Lords, nuclear fusion has long been seen as the holy grail of clean energy technology. Given the breakthrough made in the United States this week, I ask what role the United Kingdom and its scientists have played in that. What hope does the Minister have for nuclear fusion in future?

The noble Lord makes a very good point. The breakthrough announced by the Lawrence Livermore laboratory was indeed ground-breaking. It is supported by many scientists here in the UK. We have our own advanced investments and systems in Oxfordshire. I am told by the BEIS scientific adviser that the UK is very much in the premier league when it comes to fusion research. Clearly it is at an early stage at the moment and it will take a number of years to commercialise the technology and roll it out. It is not going to be an immediate solution but it certainly has tremendous potential for the future.

My Lords, on Sunday when I was passing Torness on an LNER train—it was freezing cold and there was no wind to turn the turbines—I thought how lucky we are to have nuclear energy in Scotland at the moment. However, if things go the way that the SNP wants, we will not have any in the future. Where will the UK Government have the courage to say, “As far as we are concerned, energy is a reserved area and therefore we are going to insist that we have nuclear power in Scotland as well as in England”?

The noble Lord makes a good point about the importance of nuclear energy in the UK transmission mix. The irony of the SNP’s plans is that, given that it is almost certainly not possible to run an entire distribution system purely from wind power, as the SNP is planning, it will have the benefit of being able to call on English nuclear power to back up the Scottish people in future. As always, England will want to help the Scottish people as much as we possibly can and free them from the vagaries of silly SNP green policies.