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Energy Infrastructure: Use of British Steel

Volume 613: debated on Thursday 14 July 2016

2. What steps her Department has taken to increase the use of British steel in energy infrastructure projects. (905849)

Officials in my Department regularly meet developers to make clear the importance we place on sourcing UK content, including steel, in infrastructure projects. For example, EDF says it expects that a large proportion of the steel for Hinkley Point C sourced by its supply chain will come from UK companies.

I am grateful to the Minister for that answer. As she will know, the Corby steelworks plays a vital role in manufacturing steel tubes which can be used for fracking purposes. Does she agree it is very important that, wherever possible, we use British steel, not just because it supports the industry and the jobs it provides, but because the quality and safety of the product is far superior to that of foreign competitors?

I completely agree with my hon. Friend. I have had a number of meetings with the Department for Business, Innovation and Skills to discuss exactly this point. In its 2014 report “Getting ready for UK shale gas” Ernst & Young said there would be significant benefits for jobs and growth from a successful UK shale industry, including a projected need for over £2 billion-worth of steel.

15. The Sustainable Product Engineering Centre for Innovative Functional Industrial Coatings—SPECIFIC—national innovation centre in Neath Port Talbot relies on EU funding to use Tata British steel to develop buildings that are completely decarbonised. Such buildings lower household and business energy bills and help the UK to achieve its carbon reduction targets. Will the Minister support SPECIFIC in developing its use of British steel in its innovative projects, and replace any EU funds that might be lost as a result of Brexit? (905864)

My Department has been working closely with the Department for Business, Innovation and Skills to look at how we can help Port Talbot with its energy costs. We have already made announcements about how we are going to reduce the impact of carbon policies on the steelworks in Port Talbot, and we will continue to look at further ways of helping, including considering how energy-intensive industries across the board can reduce their electricity costs by changing the way in which they generate power.

Does my hon. Friend agree that British steel can be used in energy infrastructure projects not just in the UK but around the world? Last week on a visit to the Democratic Republic of the Congo with the International Development Committee, we saw the way in which Britain is leading in helping to provide energy infrastructure in that country.

My hon. Friend is exactly right. A good example of my own efforts to improve the use of UK steel has been to urge the Offshore Wind Industry Council to do more to promote UK content. The UK is one of the biggest deployers of offshore wind to date and we can certainly hope that, once we start building our export markets, British steel will form a part of those exports.

The Minister will be aware that the two Liberty steel plants, including Clydebridge in my constituency, will be heavily involved in the supply of turbine casings for tidal lagoon projects and tubular steel structures for offshore wind turbines. The renewables industry can provide a huge market for steel produced in Britain, which represents a huge opportunity for British businesses. Will the Minister commit to revisiting the Government’s approach to the subsidy of such renewables?

On the subsidies for renewables, we have made it clear that we must balance the need to keep costs down for consumers with the need of new technologies to be subsidised in order to deploy and keep their costs down. On offshore wind, we have made it clear that we see huge potential for the cost trajectory to go down. The offshore wind industry already has a target of 50% UK content, and I am certainly encouraging it to be more ambitious. That would absolutely include the use of British steel.

Hinkley Point is expected to be one of the largest construction projects this country has ever seen, and it will require more than 200,000 tonnes of steel. Does my hon. Friend agree that this will provide a huge opportunity for the British steel industry?

Yes, and I would expand that to include opportunities for the supply chain right across the UK. The Government are working with the industry to develop a demand model that will provide a capability and capacity picture for the UK against the demand. Part of the aim is to identify the forward requirement for the components, which will include steel. We are working closely with new nuclear developers to create that supply chain right across UK businesses.