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Energy Bill [HL]

Volume 829: debated on Tuesday 28 March 2023

Report (1st Day) (Continued)

Clause 111: Modifications of the gas code

Amendment 53

Moved by

53: Leave out Clause 111

Member’s explanatory statement

This amendment, along with the amendment in the name of Lord Teverson to leave out Clause 112, would remove the Hydrogen Grid Conversion Trials from the bill.

My Lords, the intention of my amendment is quite stark and seeks to take out those provisions which allow the so-called hydrogen village experiments to take place. Why? Primarily to save British taxpayers a huge amount of money on something which is clearly, as one would colloquially say, a white elephant. Even if we had the trials—which I suspect might not happen anyway for various reasons—the lessons from those would show us that this should not be rolled out.

In order to have clean hydrogen, it has to be produced by electrolysis. There are other ways of producing hydrogen, as we know, and there are all the different colours, but at the end of the day we have to use electrolysis in the long term to produce hydrogen that is seen as a renewable fuel. The cost of that hydrogen is estimated by scientists to be something like five times the cost of the electricity used to generate an equivalent amount of heat through an efficient heat pump—it is five times more expensive. Even if we talk about economies of scale, there is no way that that cost is going to come down; in fact, it would come down only in relation to the cost of renewable electricity itself, which is its source of energy.

I suggest that we scrap this plan because clearly science says that this is not the way to use hydrogen for heating. I am a great fan of hydrogen, as I am sure most people in this House are, and it needs to be used for certain applications for which it is very difficult to use other renewable resources. We know what those are: they include a number of industrial processes and heavy transport, and it may be used for trains in certain areas and for heavy goods vehicles for some while. It is important that we use hydrogen for those purposes. It can never ever be used as a grid gas as methane is at the present.

Let me give an example of what perhaps is an even better way of achieving what we are doing. Down in my own neck of the woods, in Cornwall, we have a scheme financed by the fag end of ERDF funding. A village called Stithians has put in ground source heat pumps as a street utility, much as you would with a gas grid. I suspect that this is far more economical, and it is also liked by the residents. There have been demands for other streets in the village to have the same application.

This is in contrast to the towns in these experimental areas. As I judge it—my postbag says this to some degree, although I hear it from others as well—there is a mounting resistance to these trials going ahead. There is no great trust in hydrogen as a domestic fuel because of its properties—its ability to escape and its high flammability. These amendments take out Clauses 111 and 112, so that we can stop these trials and use hydrogen far more effectively. The money saved can also be used more effectively for decarbonisation in other areas as well. There is consumer resistance.

Assuming that the Minister is not going to accept this amendment, I have tabled another amendment arising from conversations with people involved in these trials. Many people want to opt out of them, and I fully sympathise with that. In Committee, the Minister said that households could opt out. What would the compensation be in such a case? Will the Government ensure that households can keep gas or methane, as at present? Can they guarantee this? If not, will they provide other forms of heating appliances, either electrical or an alternative form of heat and energy? Can they guarantee that there will not be forced entry into homes to make sure that the conversion takes place? I will be interested to hear from the Minister the alternatives to participating in the trial, as will people in the trial villages.

I cannot see that these trials will go ahead. There is considerable consumer resistance, and all the science genuinely says that this cannot work on a larger scale. Even if the trials do go ahead, there is no way that hydrogen is going to replace methane in the national grid or in large local heating systems. This can be done in far better ways, and the Bill allows for that. Let us call a halt to this now, save money, ease local concern and concentrate hydrogen in the areas where it can contribute and is important for our transition to a net-zero economy. I beg to move.

My Lords, I realise that I am a little late arriving for this debate. Having been here from the start of this afternoon’s proceedings, I hope that the House will allow me to make my contribution.

I will speak to Amendments 53, 54 and 57, in the name of my noble friend Lord Teverson. I support Amendment 56 in the names of the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake. I will not bore your Lordships’ House with the details of why my name appears on Amendment 56 in the Marshalled List with a line through it. Suffice it to say, I support the measures in it.

However, I support even more strongly Amendments 53, 54 and 57, which aim to get rid of the hydrogen trials altogether. Although hydrogen has a role in decarbonising our future in many sensible ways, domestic heating is categorically not one of them. I would recommend anyone who is not convinced by that statement to look at the work of the Hydrogen Science Coalition, a group of independent academics, scientists and engineers who give their time voluntarily and have no public or private vested interests. Its briefing is very clear on how it arrives at its conclusion that there is overwhelming evidence against the use of hydrogen for heating homes in the UK and in favour of using heat pumps and district heating networks. Equally, it makes a well-argued case against the provisions of Clause 111 that compel consumers to take part in hydrogen heating trials, not least because the introduction of hydrogen into UK homes will significantly increase the risk of serious explosions and fires, as well as increasing exposure to NOx emissions, which pose a significant public health risk.

To back up its own analysis, it cites the overwhelming techno-economic evidence against the use of hydrogen for heating buildings compared with other sources. There have been 37 independent studies on the use of hydrogen for heating since 2019, by organisations such as the IPCC, the IEA, McKinsey, Imperial College London, the Potsdam Institute, the University of Manchester, the Wuppertal Institute, Element Energy, the International Council on Clean Transportation, the Energy Transitions Commission, et cetera. Every one of these studies has ruled out hydrogen playing a major role in heating buildings because it will be too expensive and inefficient compared to other clean alternatives such as heat pumps and district heating. Too expensive is putting it mildly; it will be six times more expensive than going down the heating networks route.

Chris Skidmore, chair of the net zero review, said in a recent article in the Times that he

“did not think the UK should embrace the idea of repurposing gas networks to run hydrogen boilers, a proposal that is being trialled at a pilot project at homes in Ellesmere Port in Cheshire.”

The House of Lords Environment and Climate Change Committee recently said that hydrogen is

“not a realistic replacement for natural gas”

and is “not a serious option” for heating. A House of Commons Science and Technology Committee report in December 2022 said that hydrogen is likely to play only a limited role in home heating and is not a panacea. Lastly, in a report in January 2022, the International Renewable Energy Agency—IRENA—said that residential heating is the lowest-priority application for hydrogen

“because heat pump solutions and district heating options already exist.”

I apologise for labouring the point but it is important for the people in the trial villages of Ellesmere Port and Teesside. The provisions of the Energy Bill that give gas companies a new power of entry into homes to cut residents off the gas network without their consent are particularly worrying. The bottom line is that the Bill should not be promoting hydrogen heating trials that expose consumers to health and safety risks and excessively high energy costs.

My Lords, I will speak to the amendments in this group but I do not propose to detain the House for long. My views on hydrogen are relatively well known, and we had a good debate in Committee on Clauses 111 and 112. I support the previous speeches and the approaches taken to get the Government to think again about the need for these trials to be included in the Bill.

I welcome government Amendment 55, which would provide for regulations that would make some rules for the trials a “must”, rather than a “may”, which is at least an acceptance that this is a prerequisite. We need clear regulations setting out the rules that must be adopted and followed by anyone involved in these trials. But I do not think that goes far enough, because there are still a number of unaddressed issues. Therefore, I am quite sympathetic to the idea of simply removing this from the Bill and thinking again. I am also sympathetic to the proposal by the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake, who have suggested that the Government ought to undertake a certain number of measures before they embark on a decision about these trials, including involving statutory agencies such as the Environment Agency in the trials, and the Health and Safety Executive on safety issues, so that we can properly assess their environmental impact—so that we actually are using them to trial something.

At the moment, it feels very much as though this was an idea conceived of by two gas distribution companies that considered it a good idea, went to the local councils where they operate and said, “This is what we would like to do. Are you in?”. They said yes, so the companies went to Ofgem, got some money, talked to BEIS and went off on their merry way, forgetting to consult the people who live in the villages that they had identified to ask their opinion on this matter. In Committee I referred to them as

“the villages of the damned”,—[Official Report, 12/12/22; col. GC 95.]

which is colourful language, but it triggered conversations in Whitby in particular. I have had handwritten letters and emails from a number of residents thanking me for highlighting their plight. They very much felt that they were being ignored, overridden and ridden roughshod over by the gas industry in their area, assuming that they would simply comply with the idea that they should be the guinea pigs, as they see themselves, in this trial.

As pointed out by the noble Baroness, Lady Sheehan, it is an unnecessary trial because 33 or 37 independent reports have already been written on the subject of whether 100% hydrogen should be used for home heating, and the overwhelming evidence from independent assessors is that it is not a good idea. It is not a good substitute for the current system and is inferior to much better options. The noble Lord, Lord Teverson, referenced the fact that we can use district heating, with heat loops, ground source heat pumps and individual air source heat pumps. All these, running off electricity or waste heat, would be infinitely more efficient than taking hydrogen, which will be a valuable and expensive carrier of energy—it is not an energy source in its own right—and using it to heat our homes.

For all those reasons, I am very sympathetic. I would like to hear from the Minister precisely what we are trialling here, other than the two gas distributing companies’ ability to do this. What are we seeking to find out? What answers are the Government seeking to make the decision about whether we should continue this idea? Some clarity about that would be helpful for us to understand why we need this provision.

It is very worrisome that the same powers used at the moment for entry into homes to fit prepayment meters are here being extended to the fitting of much more complex works in people’s homes. That power has been suspended by the courts in the UK because it has not been applied correctly—vulnerable customers were not being looked after in prepayment cases—so why do we think we should extend the power when they have failed to apply it properly for prepayment meters? It certainly feels wrong to be rushing to give them more powers at precisely this time.

My final point is about cost. I would like to hear from the Minister how much it is costing. We have tried asking this question in a number of ways. How much is being put aside by the department and Ofgem for these trials? If it is the rumoured £100,000 per household, that is a huge sum of money. Anybody providing any kind of electrification, energy efficiency or heat pumps would do wonders with that kind of money; that would be a far better trial and a better use of public money and our time and effort.

I fully support this group of amendments. I hope this is not the last we will hear of this debate; I am sure it will pass down to the other end. I am grateful that the regulations will now be on the basis of “must”, not “may”. I do not think that goes far enough, but I look forward to the Minister’s reply.

My Lords, I offer Green support for the amendments in the names of the noble Lord, Lord Teverson, and the noble Baroness, Lady Sheehan. The economic arguments for why hydrogen as a home heating mechanism makes no sense at all have already been very clearly made. I aim not to repeat anything that has been said but simply to add a couple of points to it. I very much agree with the point made by the noble Baroness, Lady Worthington, about prepayment meters; that was written in very large letters on my paper, but I have now crossed it out since it has already been covered.

In this debate we have not perhaps highlighted the degree of physical disruption. The noble Baroness, Lady Worthington, referred to receiving many expressions of distress from the affected villages; I have also received those. In the Government’s own terminology, research shows that it will

“undoubtedly result in some physical disruption to the property.”

Those are the Government’s own words. What that actually means is that we will have to see pipework surveyed and possibly changed; gas meters replaced; boilers, gas hobs and gas cookers replaced, as well as four-inch ventilation holes in the area of the boiler and the appliance to make it compatible for 100% hydrogen. The biggest challenge of all, perhaps, is the small in-house pipes that may frequently be embedded in walls or underneath floors. Think about the kind of disruption in an older house; just tracking those down, finding where they are and establishing whether they are adequate for hydrogen is massively disruptive. Every home will have to be checked and double-checked to make sure it is safe before hydrogen can be piped into it.

The other safety point that has not been raised yet, but I think really should be, is that burning hydrogen in the air produces nitrous oxides, which are a pollutant in their own right. It is often said that when you are using hydrogen, water is the only by-product, but that is the case only when hydrogen is used in fuel cells. Nitrogen dioxide is a key air pollutant that is harmful in its own right and is a precursor to other concerning materials including fine particulate matter and ozone.

I have just one final thought. I understood the considered narrative of the noble Baroness, Lady Worthington, about how we got to where we are, but when I go around your Lordships’ House and see the people who are propounding the idea of hydrogen for home heating, I notice that it is of course the existing industry and the vested industry interests. That cannot be how we decide our energy future, in so many areas but perhaps particularly obviously in this one.

My Lords, I thank the noble Lord, Lord Teverson, and all other noble Lords and Baronesses who have spoken. While I may agree with the noble Lord, Lord Teverson, that these trials are not a good thing, they are upon us and therefore we have to deal with what we face rather than what we might not have faced had we stopped the trials in the first place. I do not think the Government are about to abandon the plan, and therefore we have some concerns about the plan as it goes ahead.

Clause 111 makes certain modifications to the Gas Act 1986 so that the person running the trial has clear grounds to enter property. That causes me concern that they can carry out essential works and safety checks and disconnect gas supply. Can the Minister deal with some questions? He may not be able to deal with them tonight and may want to write to me later. When can property be entered? What safeguards will be in place? What burden of proof will be applied on entry? When can a property not be entered? Will future guidance be published and, if so, when can we expect it to be with us? The Labour amendment

“requires the Secretary of State to take a number of steps with regard to the areas and people affected by hydrogen grid conversion trials and to make arrangements for Ofgem to provide information, alternative heat sources and offer the right of opt out (which would disapply the right of gas transporters to enter premises to disconnect). It would also require the Environment Agency to monitor and report on hydrogen escape, and the Health and Safety Executive to monitor safety implications.”

Subsection (1) provides the Secretary of State with a power to make regulations by statutory instrument to require a person conducting the trial to follow specified steps to ensure consumers are appropriately informed about the trial and the need for them to be disconnected from their gas supply before it happens. This clause also provides the Secretary of State with a power to make regulations to introduce consumer protections for people who are, or are likely to be, affected by the trial, and a list of examples is provided.

Our amendment sets out a number of reasonable steps, ensures that people are not disadvantaged, whether they participate or take an alternative, and ensures an alternative is offered and they can opt out. The trials are much more popular in Redcar, I am led to believe, than they are in Whitby. An exchange of correspondence took place between Graham Stuart, the Minister at DESNZ, and Justin Madders MP and Louise Gittens, who is the leader of Cheshire West and Chester Council. To quote from the letter from Graham Stuart, he said:

“I fully agree that local support for the trial is essential … However, we will only go ahead with a trial in an area where there is strong local support … I do agree it is very important this context is set out clearly, particularly for the communities in the areas across the country served by the gas networks which the networks are assessing.”

If that is true, certainly in Whitby, I do not think a trial will proceed, but I may be wrong. I would welcome the Minister’s assessment of the correspondence and what he makes of it in relation to the trial. It is not so much about cost, although there is a cost, and it is not so much about safety, although there is a safety issue; it is about local democracy and whether they want the thing to go ahead in the first place.

I thank all noble Lords who have contributed. I start by addressing the point raised by the noble Lord, Lord Lennie. This is a matter for which I have ministerial responsibility, so I am familiar with all the issues. I too am getting, not a massive stream of correspondence, but a lot of correspondence from the people in the two trial areas. I have met Justin Madders, the MP for the Whitby trial area, Ellesmere Port, and of course I know Jacob Young very well from Redcar. The point that Graham Stuart made in that letter is still absolutely valid. We are waiting for the submissions of the two rival networks, which we should receive later this month. A lot is happening this week; it is a busy week. One of the factors that we will carefully take into consideration is precisely the point that Graham Stuart set out in his letter: the degree to which there is local support. Clearly, one way to measure that is to talk to the local Members of Parliament and the local authorities; that will be critical in any decision-making.

Let me also address the question from the noble Baroness, Lady Worthington, on the costs of the trial. I cannot give the noble Baroness an overall cost yet because we have not received the final submissions from the networks, but I can say that consumers in the trial location will not be expected to pay more for their heating than they would have if they had remained on natural gas. They will also not be expected to pay for the installation and maintenance of either any hydrogen-capable appliances or any alternative heating option that they wish to go for.

Let me now address Amendments 53, 54 and 57, tabled by the noble Lord, Lord Teverson and the noble Baroness, Lady Sheehan. As noble Lords will know, decarbonising heat in buildings and industry is essential if we are to deliver net zero. One of the great things about this country, but also one of our problems, is the massive diversity and age of buildings in the UK, as a product mainly of the industrial revolution, and the diverse consumer needs. I think most reasonable people would accept that no single solution can provide the best option for everyone. I agree with the noble Baroness, Lady Worthington, that the majority of the solution will probably be electrification, but there will be some properties for which it is not suitable.

I am of course aware of the wide range of views both in the House and among outside lobby and interest groups on the potential use of hydrogen for heating. The Government’s view is that low-carbon hydrogen may offer an option for decarbonising heat in buildings alongside the various other technologies such as heat pumps and heat networks that have been referred to.

The Government’s policy is that we intend to take a strategic decision on the role of hydrogen in heating in 2026. Most reasonable Members of the House would, I hope, accept that, if we are to take those decisions, it should be on the basis of on robust evidence. The whole point of a village trial is that it will provide important evidence on the technical feasibility, costs, benefits and other impacts of using hydrogen instead of natural gas to heat buildings in the UK—most importantly, using the existing gas network. We have already done neighbourhood trials where hydrogen has been installed alongside the gas network. The question is: can it be used utilising the existing network? That is why the idea of these trials is to convert the existing gas network to carry hydrogen, so that we can gather evidence that will allow us to make the important decisions required on the best way to decarbonise heating and reach what we all want to see: net zero by 2050.

The noble Lord, Lord Teverson, asked what opting out of the trial would mean for residents in any trial area, which is a very good question. The answer is that, because the whole idea of the trial is that the existing gas network will carry hydrogen instead of natural gas, it will not be possible for existing consumers in the village trial area to continue to use natural gas during the period of the trial. As I have previously confirmed, all consumers will have the right to decide whether they use hydrogen or an alternative heating solution for the purposes of this trial; that could be biomass, electricity or other fuels.

We have always been clear that the gas network delivering the trial must engage with residents to develop what will be an attractive consumer offer for everyone in the trial area. We have also been clear that this offer must include alternative options for consumers who do not wish to, or cannot, connect to hydrogen, such as for electric cookers and heating systems. I repeat that nobody in the trial will be forced to take hydrogen if they do not want to, and we have committed to ensuring that customers are not financially disadvantaged either through taking part in the trial or opting for another alternative technology. That requirement was set out in a joint letter to the gas networks from the department and Ofgem; it is a fundamental requirement, which will have to be met before either myself or the department approves the trial.

I turn to the specific clauses that the noble Lord opposes. Clause 111 includes essential provisions for the effective and safe delivery of the trial. It expands the duty of the gas transporter running the trial to undertake essential safety work—without charge, obviously. It also makes certain modifications to the Gas Act 1986 to build on existing provisions concerning powers of entry. This will ensure that the gas transporters can carry out any essential works, including installing appliances and undertaking safety checks. Let me make it clear: these are powers that the gas networks already have in relation to the use of natural gas.

Clause 112 provides the Government with the powers to establish additional consumer protections for people taking part in the trial. Gas networks are working locally with communities to provide information to consumers and to understand and respond to any concerns that local communities, local councillors, councils, Members of Parliament et cetera have about the trial. This has included opening demonstration centres in their local communities to raise awareness of what the trial would involve. Building on this existing engagement, regulations made under the clause will ensure that people will have all the information required to make an informed choice about whether they wish to participate.

We recognise that this trial is a first of its kind. That is why we committed to introduce additional consumer protections in the response to our public consultation, published in 2022. For example, this means that consumers in the trial area, as I said, will pay no more for their heating than they would if they remained on natural gas. It also means that proposals from the gas networks must ensure the least possible disruption to consumers.

The second power in this clause, to introduce regulations for consumer protections, will work alongside existing protections such as the Consumer Rights Act 2015 and the Gas (Standards of Performance) Regulations 2005. I hope noble Lords will agree that these provisions, which were well received by stakeholders when we consulted on them, are crucial to ensure the fair treatment and protection of consumers in the trial area.

I hope that, with the explanations I have been able to provide, the noble Lord, Lord Teverson, and the noble Baroness, Lady Sheehan, will appreciate that the purpose of the trial is to provide important evidence for the strategic decisions that we will need to make on the future of heat decarbonisation. I hope that they have been reassured that these clauses are necessary for the safe and effective delivery of the trial, and will therefore consider withdrawing the amendment.

I want to press on the question of what is being trialled. The Minister mentioned feasibility, benefits and costs, but what about the environmental impacts of this trial? We are talking here about a global warming gas, and a very slippery gas because it is the smallest element—it escapes everywhere. Will the regulations contain measures to monitor the environmental impact of both the NOx emissions in the home and the greenhouse gas impact of the hydrogen, which will leak when it is distributed that widely? Can that be included in the trial so we can also assess those disbenefits?

Finally, it is true that the only reason really that some houses might not qualify for a heat pump is if they are not very efficient. It is ironic that, for safety reasons, the leakier the house, the more likely it is to then be able to take hydrogen. This precious commodity, which is very expensive to produce and will be very inefficient, is being used in houses which are leaky and being made leakier to be made safer. It seems just so counter to everything we want to achieve on efficiency, resilience and climate change. I hope there will be a trial of the environmental impacts on air quality, climate change and energy efficiency, not just the benefits to the gas industry.

I know the noble Baroness has strong views on electrification but let me reassure her that this is precisely the purpose of the trial. We need to use an existing network to find out what happens to hydrogen in an existing network. Clearly, environmental monitoring and checking for leaks and so on is a crucial part of it. It is one of the reasons we need to do it on an existing network in an existing community, to find out what happens outside of theoretical lab experiments where it is very easy to set up a trial with new pipework, new valves and new equipment. I have visited hydrogen demonstration houses up in Gateshead, my home area. It works very well but these are brand new properties, constructed with hydrogen appliances and new pipework. That is not a very good trial as to how it would work in the real world in existing communities. That is why we need to do the trial. The things that the noble Baroness asked about are exactly what we need to be checking and monitoring to judge the effectiveness of any hydrogen experiments in the real world.

I turn to Amendment 56, tabled by the noble Lords, Lord Lennie and Lord Teverson, and the noble Baroness, Lady Sheehan. This amendment covers several aspects which I fully agree are important for the safe and effective delivery of the village trial. However, I assure noble Lords that the evidence that this amendment seeks to gather through a statutory consultation is already being gathered and will be reviewed by the department as part of our assessment process, following the submission of final proposals at the end of this month. As I said, in May 2022, we sent a joint letter with Ofgem to the gas networks setting out an extensive list of requirements that proposals for the trial should meet. This included requirements mentioned in the amendment, such as local support, costs, environmental impact and consumer protections, as well as many other important areas.

After the gas networks submit their proposals for the trial—later this week, as I said—the department will undertake a thorough assessment against the full list of requirements set out in the letter. That process will involve expert input from the various statutory bodies involved, including the Health and Safety Executive and Ofgem. We will publish the result of that assessment later this year, including the relevant evidence to explain our decision, and that will be available to all noble Lords. I reassure the House that we fully understand the importance of conducting the trial properly.

I touched on this earlier but the noble Lord, Lord Teverson, raised the point about local support for the trial. I reiterate that we will go ahead with a trial only in an area where there is strong local support. The gas networks are working closely with local authorities, communities and Members of Parliament as they develop their trial proposals. My officials also meet regularly with the relevant local authorities. Final proposals for the trial will need to contain evidence of strong support from the local community, validated by an independent external source, such as a local council. Again, I am happy to meet the local Members of Parliament.

The networks are extensively consulting local residents to develop an attractive consumer offer tailored to the community. They have opened drop-in centres in both Whitby and Redcar where anyone can engage directly with them and ask questions about what the project means for them, and have held a number of public events.

Safety is of course fundamental, which is the point made by the noble Baroness, Lady Sheehan. Before any community trial can go ahead, the Health and Safety Executive will need to be satisfied that the trial will be run safely. No trial will go ahead until all necessary safety assessments have been successfully carried out. I hope noble Lords will accept my reassurances on that.

If it goes ahead, the trial will start in 2025 and provide vital evidence that will be required to enable the Government to make decisions in 2026 on any potential future role for hydrogen in decarbonising heat. I hope noble Lords will accept that undertaking another formal consultation would duplicate the work that the department and the gas networks are already doing, and could delay important milestones for ultimately meeting net zero.

I agree that the trial must be conducted properly, and I have already spoken about the additional consumer protections that will be in place for the trial. Those protections, which must be met by the gas networks, also mean that the trial must be delivered with minimal disruption to consumers.

I hope I have been able to reassure noble Lords that the department will carefully consider all these factors in coming to a decision on the trial. Importantly, we will be closely examining the evidence and outcomes of the gas networks’ engagement with local authorities and consumers in the trial areas. I hope that, with the reassurances that I have been able to provide, the noble Lord, Lord Teverson, will consider withdrawing his amendment.

Could the Minister please write to me about the questions I asked about entering properties and whether further guidance will be published and available?

As I said, the powers that we propose to provide are essentially similar to those that the networks already have on the basis of essential safety works. Still, I am happy to provide the noble Lord with further information and details.

My Lords, when the IPCC report on the global warming challenge came out last week, and it gave a pretty dire view, the Secretary-General of the United Nations, António Guterres, who I think had just been watching the Oscars, said it was

“everything, everywhere, all at once”—

but I do not think he would have included the village hydrogen trials within that broad definition. I understand what the Minister has said, and I welcome all his assurances to local citizens about how the trials will work, but, frankly, the science clearly says that hydrogen sent through the gas pipe network to a range of residential properties does not work, does not make sense and is not going to happen in the future.

I welcome that the noble Lord, Lord Lennie, read out that letter from Graham Stuart because, in terms of the Ukrainian/Russian war, it gives an off-ramp to the Government to ditch this scheme. Very occasionally, I try to give the Government advice from my humble Bench, and it is of course a waste of time, but I say to the Minister that he should make sure that he gets those villages to say they do not want it in the end. That will let everyone off the hook, faces will be saved, and this thing will never actually happen. That is what I believe will happen at the end of the day, by 2025. But, in the meantime, I withdraw my amendment, because it is unnecessary.

Amendment 53 withdrawn.

Clause 112: Regulations for protection of consumers

Amendment 54 not moved.

Amendment 55

Moved by

55: Clause 112, page 100, line 26, leave out “may” and insert “must”

Member's explanatory statement

This amendment requires regulations under Clause 112 (regulations for the protection of consumers: hydrogen grid conversion trials) that make provision for the imposition of financial penalties to include provision for a right of appeal.

Amendment 55 agreed.

Amendments 56 and 57 not moved.

Amendment 58

Moved by

58: After Clause 113, insert the following new Clause—

“Treatment of recycled carbon fuel and nuclear-derived fuel as renewable transport fuelAfter section 131C of the Energy Act 2004 insert—“131D Recycled carbon fuel and nuclear-derived fuel(1) An RTF order may—(a) designate as recycled carbon fuel a description of liquid or gaseous fuel which is produced wholly from waste derived from a fossil source of energy;(b) designate as nuclear-derived fuel a description of liquid or gaseous fuel which is produced wholly using, or by a process powered wholly by, nuclear fuel.(2) Where a designation under subsection (1) is in force, the recycled carbon fuel or nuclear-derived fuel is to be treated for the purposes of this Chapter and any RTF order as renewable transport fuel.””Member's explanatory statement

This amendment, which inserts a new clause in Chapter 3 of Part 3 of the Bill, provides for recycled carbon fuel and fuel derived from nuclear energy to be treated as a renewable transport fuel for the purposes of renewable transport fuel obligations under Chapter 5 of Part 2 of the Energy Act 2004.

Amendment 58 agreed.

Amendment 58A

Moved by

58A: After Clause 114, insert the following new Clause—

“Review into fire risks of photovoltaic panels and lithium-ion batteriesThe Secretary of State must, as soon as reasonably practicable, lay a report before Parliament considering the fire risk of photovoltaic panels, lithium-ion batteries storage facilities and similar technologies that the Secretary of State considers appropriate.”

My Lords, in Committee, I tabled an amendment that proposed to extend the zero VAT that is offered for some green energy items to the batteries used to improve the efficiency of solar panel arrays. Unfortunately, the Minister was non-committal, but, having written to the Chancellor, I found that he was rather more enthusiastic, and I was delighted to see in the recent Budget that that measure will now go ahead, so I have not had to bring that amendment before your Lordships’ House again.

However, because of my involvement with solar panel arrays and batteries, quite a number of people got in touch with me to draw attention to their concern about some safety issues with solar panels and lithium-ion batteries, not least in relation to fire. For example, Zurich Insurance recently did some research that showed that, during the last year, fire crews across England were called out 10 times a month, on average, to deal with solar panel-related fires. It gave an example of a claim that it had to deal with in 2020 for a solar panel fire in a block of flats in Kent which left 30 people temporarily homeless and caused £1.5 million-worth of damage.

But there is a much bigger problem with lithium-ion batteries, which you find in many household products, of course—our mobile phones, for example, and even those singing birthday cards that we sometimes get. Perhaps most significantly, more and more of them are in the increasingly large number of e-scooters and e-bikes. As there is a growing number of those batteries, there are growing fire problems, because lithium batteries provide high energy densities, which mean that they can create severe fires with very high temperatures and exothermic reactions, creating significant challenges for our firefighters. Research, again from Zurich Insurance, found that there has been a 149% increase in the number of e-bike and e-scooter fires since 2021. Research shows that fires resulting from other devices powered by lithium batteries has increased by 63% in that time.

Zurich Insurance has sent me details of several incidents involving lithium batteries, including an £84,000 claim for a scooter that went up in flames in a garage and a £13,000 claim for an e-bike that exploded in a customer’s bedroom. AXA, the insurance company, has given me evidence that shows that, in just the two months of June and July last year, it was involved in claims of around half a million pounds.

The London Fire Brigade and other fire brigades have expressed concern. In June 2021, 60 London firefighters were needed to tackle a blaze on the 12th floor of a tower block in Shepherd’s Bush caused by a faulty e-bike battery. In July of that year, five people in Walthamstow were hospitalised by a fire started by an e-bike.

The other fascinating thing is that, until recently, the number of fires in waste disposal sites had been going down. Sadly, that trend has now been reversed, and the evidence shows that somewhere in the region of 48% of all landfill site fires are now caused by lithium batteries. The cost to the waste disposal people and the fire brigades is something in the region of £158 million a year to deal with just that.

Clearly, there are very significant problems which need to be addressed, but we do not want to stop using these technologies; indeed, we want to move rapidly forward, exploring ways to capitalise on how best we can make use of them as sources of new clean energy. However, as we increasingly use these green energy sources, we have to acknowledge that new and emerging risks are coming down the track.

I accept that there are many rules and regulations that already govern the sale and use of these products, but the warning signs are there that the regulations we currently have—those designed to keep us safe—are not keeping pace with the real-world application of these new technologies.

Interestingly, the National Fire Chiefs Council recently said, very significantly, that

“the problem has ‘blind sided’ conventional systems processes and solutions”.

In other words, we need to look for a new way forward—and that is all that the amendment I am proposing does. It asks the Government to look into the issue and to bring forward a report as soon as possible. Nothing could be simpler than that, but it is what a lot of people would like to see happen. I beg to move.

I thank the noble Lord for bringing this information to our attention. Some interesting reports documenting the risks are available, and I refer particularly to the report from the Institution of Fire Engineers on solar power fire risk and to

I have a couple of points to add to the comments already made as to whether it would be worth directing information about the storage of the batteries. It should be highlighted in particular that batteries are often stored in garages next to parked cars, which can have similar battery systems, and will not always be easily accessible.

The risks of lithium ion batteries from a fire safety perspective apparently have been well documented. However, the other element is that the risk with lithium ion batteries is not just fire. Once the battery fails—I think the term is “runs away”—the cells usually start to give off smoke. Thermal runaway is the chemical process within the battery which produces heat, as well as flammable toxic chemical gases, very quickly, often before any flames arise.

I think it is fair to say that, although the information is out there, it has not been properly documented. I wonder whether the health and safety considerations of the increasing use of these batteries and solar panels have been taken on board. Does the Minister think that there is a problem and, if the answer is yes, what does she propose to do about it?

My Lords, I thank the noble Lord for his amendment on requesting a report into the fire risks of photovoltaic panels, lithium ion battery storage facilities and similar technologies. I was delighted to hear of his welcome in the Budget for the VAT exemptions.

First, I reassure the noble Lord that the health and safety regimes surrounding net-zero technologies are a priority for the Government. All electrical equipment requires safe installation and use. The Government recognise the importance of net-zero technologies such as electricity storage and solar PV in their ability to help us to use energy more flexibly and decarbonise our electricity system cost-effectively.

The data collected so far indicates that the risk from solar PV fires is low. However, it is right that we work with the industry to understand why any incidents happen and help to stop future occurrences. Over a three-year period and an overall cost of £135,000, the Government commissioned the Building Research Establishment to develop new guidelines for PV system installers, designers and the fire services, with the aim of making solar PV even safer. In February this year, the RISC Authority, the Microgeneration Certification Scheme and Solar Energy UK published an updated joint code of practice on recommendations for fire risk prevention in UK solar systems. Grid-scale lithium ion battery energy storage systems are covered by a robust regulatory framework, which requires manufacturers to ensure that products are safe before they are placed on the market and installed correctly, and that any safety issues found after products are on the market or after installations are dealt with.

In 2018, the Government set up an industry-led electricity storage health and safety governance group, which is responsible for ensuring that an appropriate, robust and future-proofed health and safety framework is sustained as the industry develops and electricity storage deployment increases. The Government are currently working with the group to support the development of a product and installation publicly available standard for domestic small-scale battery storage and guidance for grid-scale storage. They will both be published this year.

Most of the specific issues of e-scooters and bicycles fall within the remit of the Office for Zero Emission Vehicles, and I shall ask it to write to the noble Lord. I can also confirm that Defra will soon publish a consultation on battery recycling.

I do not believe that a specific report on fire risk of photovoltaic panels, lithium ion battery storage facilities and similar technologies mandated by the Secretary of State is necessary. While I welcome the noble Lord’s intention, we believe that working alongside industry and the fire services to manage specific risks is the appropriate way forward. It ensures that these vital technologies are installed, operated and decommissioned in a safe way, while still delivering the best outcomes for consumers. I hope that the noble Lord can recognise the Government’s sustained commitment to enabling the deployment of net-zero technologies in a safe and sustainable way.

In addition, on the concerns expressed by the noble Baroness, Lady Blake, about lithium ion batteries and their ability to combust, I visited last week a very clever packaging firm called Tri-Wall in Monmouth, which has developed packaging specifically for lithium ion batteries to be transported by air safely. The packaging itself will detect any change in heat in the batteries that it contains and change the structure of the packaging into water that will put the fire out before it even gets out of the packaging. Very clever technologies are being developed specifically around lithium ion battery transport and storage.

I hope that, with those few reassuring remarks, we can ask the noble Lord to withdraw his amendment.

My Lords, the time is late; I shall be very quick indeed. I was well aware, of course, of the work that has been done looking at the package of arrangements around solar panels and their batteries. I really wanted to use it as a peg on which to hang the wider issue of all forms of lithium batteries, in particular. I am pleased to hear about the 2018 established group. It would be very helpful if we could see some of the output of that. I am grateful, too, to hear that there are going to be new standards, but the truth is very simple: you can have all the standards you like, and the products may be okay, but if they are not used appropriately and not decommissioned appropriately, then real problems exist, and that is what is happening. There are a huge number of fires in our landfill sites because people are not doing what they are meant to do in disposing of batteries. We have to find a way forward. That is why I wanted a report. I am disappointed that the Minister is not prepared to go further, but at this stage I beg leave to withdraw the amendment.

Amendment 58A withdrawn.

Consideration on Report adjourned.

House adjourned at 10 pm.