Sarah Jones is the Labour MP for Croydon West.
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Today the Department for Energy Security and Net Zero is publishing a consultation on the design of a gas shipper obligation. The Government intend for the gas shipper obligation to be the long-term funding mechanism for hydrogen production business model payments to initial hydrogen production projects and related costs. Decisions on funding for future hydrogen production business model projects will consider consumer affordability, value for money and fairness.
Full debate: Gas Shipper Obligation Consultation
My hon. Friend is absolutely right. Green hydrogen is vital, not just for the decarbonisation of heavy industry but for aviation and maritime. It has the potential to create thousands of very highly skilled jobs in every region of the country. We have already confirmed support for 11 green hydrogen projects from Cumbria to Cornwall, and from Scotland to Kent. I look forward to saying more on our hydrogen journey soon.
Full debate: Great British Energy: Job Creation
I would be absolutely delighted to meet my hon. Friend; we can talk about data centres at the same time. Carbon capture is an incredibly important part of our future. We know that we have to have it in order to decarbonise some of our very hard-to-decarbonise industries, and I would be delighted to talk about the possible jobs that it could bring as well.
Full debate: Topical Questions
The national wealth fund is delivering a key manifesto commitment to set up a Government-backed investor—in some ways like the sovereign wealth funds we see in other countries—that will support the UK’s industrial strategy and economic growth. It will play a central role in our clean power mission by creating jobs in rapidly growing green industries. My role sits across the Department for Business and Trade, where I work on industrial strategy, and this Department, where I work on industrial decarbonisation, so I have a unique vantage point to see the benefits of the national wealth fund and all the opportunities it will bring.
Full debate: National Wealth Fund: Opportunities for Industry
I would love to hear more, as I am sure would the Minister for Energy, my hon. Friend the Member for Rutherglen (Michael Shanks). We are committed to all forms of renewable energy if they are economical, which is why we ringfenced tidal in the latest contracts for difference auction, which resulted in six tidal projects being successful, securing up to 28 MW. We continue to look at what more we can do to support this more nascent technology, including the role that GB Energy can play in the future.
Full debate: National Wealth Fund: Opportunities for Industry
The draft regulations were laid before the House on 30 October 2024. The Government believe that the answers to the challenges of energy security, affordability and sustainability point not in different directions but in the same direction: towards clean power. Investing in clean power at speed and scale can help to tackle the climate crisis and create good jobs. It is the only route to protect bill payers and ensure energy security. That is why making Britain a clean energy superpower by 2030 is one of this Government’s five central missions.
Although renewable energy is at the heart of our plan to deliver clean power, we also know that we must bring forward low-carbon generation sources, providing added security for when the sun does not shine and the wind does not blow. This includes flexible supply sources that can scale up or down instantaneously to meet peak demand. Some flexibility can be provided by short-duration technologies such as batteries, which can help to balance the system within each day, but we will also need long-duration technologies, which can run for extended periods of low renewable production.
Gas is expected to be used less in our future energy system, taking a backseat, and only to maintain security of supply. Although gas will continue to play an important role in the system, it is only right that we should expect any new or substantially refurbished combustion plants to be built net zero-ready. This is why we are updating the existing regime and introducing the new decarbonisation readiness requirements.
Before I turn in detail to the decarbonisation requirements, let me set out the current regime. Since 2009, all new-build combustion power plants in Great Britain with capacity over 300 MW have been subject to the carbon capture readiness requirements. Those regulations require plant operators to demonstrate that it is technically and economically feasible to retrofit carbon capture and storage technology. Due to the 300 MW threshold, the policy has seen limited application since 2009. It has also contributed to a costly market distortion by incentivising the building of smaller, less efficient plants, and inadvertently creating an unacceptable loophole that has resulted in a significant number being built at 299 MW to avoid the carbon capture readiness requirements.
The policy landscape has changed significantly since the carbon capture readiness requirements were introduced. Plant operators now have an alternative pathway to decarbonise through hydrogen-fired generation, and there has been the introduction of the UK’s legal obligation to meet carbon budgets and to reach net zero by 2050.
In March 2023, the previous Government published a final consultation on the decarbonisation readiness proposals, alongside the publication of two technical studies for hydrogen and for carbon capture and storage. The consultation received positive feedback from industry and we published a response in mid-October, giving the go-ahead to proposals set out in the consultation.
Let me turn to the detail of the regulations. This statutory instrument will amend the Environmental Permitting (England and Wales) Regulations 2016 by inserting new schedule 25C. This will remove the 300 MW minimum capacity threshold, removing any existing market distortion and supporting rapid decarbonisation by setting out that nearly all new and substantially refurbished combustion power plants must have a credible plan to decarbonise.
The regulations will also move the requirements from the planning consent process, where they currently sit for carbon capture readiness, to environmental permitting. This will ensure that the responsibility for regulating the requirements falls to the Environment Agency rather than to local planning authorities and the Department for Energy Security and Net Zero. Unlike local planning authorities, the Environment Agency is already involved in the assessment of carbon capture readiness and has the technical expertise to assess the requirements. As I mentioned a moment ago, this will also include hydrogen readiness.
The new requirements will now enable combustion plants to demonstrate decarbonisation readiness through conversion to hydrogen firing as well as carbon capture. In doing so, the instrument introduces hydrogen conversion readiness and carbon capture readiness assessments, which are proportionate to the developing nature of hydrogen to power and of carbon capture and storage. It will also expand the generation technologies in scope of the requirements to include biomass, energy from waste, and combined heat and power plants, ensuring that a higher number of carbon-intensive plants are now captured.
The updated requirements are intended to strike a balance, ensuring that new-build plants are ready to take full advantage of future decarbonisation opportunities —and that the refurbishment of old sites is conducted to take advantage of those opportunities too—while acknowledging the emerging state of hydrogen and carbon capture technologies and their enabling infrastructure. We expect that the requirements will be strengthened over time as the generation technology improves and clarity on enabling infrastructure availability increases.
In summary, the regulations will ensure that the gas capacity that we need for the security of supply is future-proofed and that there is a credible plan to transition to low-carbon operation. In doing so, they will help towards our aim to become a clean energy superpower and deliver net zero by 2050. I commend the draft regulations to the Committee.
Full debate: Draft Environmental Permitting (Electricity Generating Stations) (Amendment) Regulations 2024
Making Britain a clean energy superpower by 2030 is one of the Prime Minister’s five missions. Unabated gas currently provides the majority of flexibility in Great Britain and so the deployment of hydrogen to power—the conversion of low-carbon hydrogen to produce low-carbon electricity—will play an important part in displacing unabated gas generation from the power system, to support the clean power mission, and the Government’s legally binding target to reduce greenhouse gas emissions to net zero by 2050.
Low-carbon hydrogen can make our energy system more flexible, resilient, and independent. When connected with large-scale storage, hydrogen to power can provide electricity to cover longer periods of lower renewable output, while also creating a decarbonisation pathway for unabated gas power plants. The hydrogen to power business model will de-risk investment in hydrogen to power by mitigating the deployment barriers we identified, through a dispatchable power agreement-style business model, helping to support the unlocking of investment in hydrogen to power and improving the pipeline of projects.
Full debate: Hydrogen to Power Business Model: Consultation Response
Today, I am pleased to have laid a departmental minute setting out the details of a series of contingent liabilities associated with the carbon capture usage and storage track-1 clusters. Carbon capture usage and storage is a critical component of the UK meeting its 2050 net zero commitment particularly via ensuring energy and supply chain security and enabling hard-to-abate sectors to decarbonise.
Carbon capture usage and storage is the only feasible method for decarbonising many hard-to-abate sectors such as cement production, and is currently the most cost-effective method of decarbonising others, such as dispatchable power. While there is growing interest worldwide, a programme of this nature is first of a kind and consequently there are multiple market barriers which inhibit the development of a carbon capture usage and storage market in the UK.
The table below sets out the HMG’s maximum exposure for each of the programme-associated contingent liabilities. These concern the five projects that were part of the October announcement: two transport and storage networks, Net Zero Teesside, Protos, and EET Hydrogen. We will notify Parliament of additional contingent liabilities when other projects reach financial close. It is important to note that while the table represents the maximum possible exposure, the probabilised exposures and likely crystallisations are far lower. There are robust risk management frameworks in place. Our assessments indicate that there no liabilities that are likely to be realised and the vast majority are very remote.
The contingent liabilities are necessary as it provides confidence in this first of a kind sector. Carbon capture, usage and storage will enable us to accelerate to net zero while maintaining energy security and delivering growth to our industrial heartlands.
Full debate: Carbon Capture, Usage and Storage
On 4 October, the Government announced £21.7 billion over the next 25 years to launch the UK’s carbon capture, utilisation and storage industry. We will provide further details on the next steps for CCUS, including track 2 projects such as Acorn, in the coming months.
Full debate: Oral Answers to Questions
We are committed to track 2, and I recognise the huge advantages of Acorn that the hon. Gentleman has highlighted. Our record £21.7 billion investment demonstrates our long-term commitment and gives industry the certainty it needs. The ups and downs of CCUS under the previous Government did not provide the certainty that people required, and certainty is what we are looking to deliver. We understand that people want clarity, and we will be making further announcements in the coming months.
Full debate: Oral Answers to Questions
We realise that CCUS is an emerging industry, but it is also one that we can lead on internationally, thanks to the unique geography of the North sea. We will do all we can to help industry scale up in this technology, which we believe will play a crucial role in our mission towards clean power.
Full debate: Oral Answers to Questions
I completely agree with my hon. Friend’s sentiment and commend the work that he is doing in his constituency. Low carbon technology will of course play a critical role in our future, from hydrogen to carbon capture and to renewable energy. I am pleased that, in the Budget, we saw the funding of 11 hydrogen projects, which will drive jobs and growth. I am really keen to talk to him about his plans for Peterborough becoming the King’s Cross for a hydrogen network and applaud the work that is going on in his constituency around green jobs.
Full debate: Renewable Energy: Job Creation
We are ambitious to create all the jobs that we want to see in the green technologies of the future. I would be very interested to hear more about what the hon. Gentleman has to say. The Climate Change Committee estimates that up to 750,000 net jobs could be created by 2030. Opposition Members have decided that they do not support that path. The question is: why are they objecting to all these new jobs that we will be creating across our country?
Full debate: Renewable Energy: Job Creation
I am glad that the hon. Gentleman asks what we are doing to engage with the Department for Energy Security and Net Zero, because I sit across that Department and the Department for Business and Trade. The entire point of my role is to make sure that we join up the two Departments, so that we can crack some of these problems. The grid is No. 1 on our list.
Full debate: Oral Answers to Questions