17:45 The Secretary of State for Energy Security and Net Zero (Grant Shapps)

My right hon. Friend is absolutely right about the importance of hydroelectricity in the overall energy mix. It is something that we are working on, he will be pleased to know, and I am happy to offer him a meeting with the Bill Minister, the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), to discuss his constituency case in more detail.

All of this is why, earlier this year, I was appointed to lead the new Department for Energy Security and Net Zero. It is why, just 50 days later, we published our ambitious “Powering Up Britain” blueprint for the future of energy security in this country. We are bringing all that work together in the Bill before the House.

As the hon. Gentleman will know, Ministers must be quite careful when commenting on the quasi-judicial planning decisions that his question goes into, but he should not mistake—nor should anyone in this House—this Government’s determination to get on with things like CCUS and hydrogen. That is why we have announced a £20 billion programme for CCUS, the largest of any country in Europe. As I say, though, and as he well knows, specific planning decisions are matters that the planning inspector advises Ministers on.

The Secretary of State talks about powering up Britain, but perhaps he could take some lessons from how the Welsh Labour Government and Welsh Labour councils are powering up Wales. The other week, I visited a very important development in Rumney in my constituency, where there is a new mixed housing development. Every single one of those properties has a ground source heat pump, photovoltaics on the roof and an electric vehicle charger on the drive. They are well insulated, they are using sustainable materials, and they are bringing down costs for consumers now, but also contributing to net zero. Is that not the example we should follow across the UK?

I commend the Secretary of State for the Bill, and I welcome its key objectives, as I think everyone in this House does. However, a number of amendments were made in the other place, particularly one relating to a net zero duty for Ofgem. Those amendments are now in the Bill. Could the Secretary of State clarify whether the Government will support all of them, particularly the one on Ofgem?

I thank my right hon. Friend for his intervention. We will be looking very closely at the proposed amendments—the Bill Minister himself will be addressing those in detail, which is the right way to do it—and of course, the regulator is already very largely focused in that direction. As I often point out, of everybody in this place I have a particular interest in making sure we achieve what we have set out to do, because this House has kindly legislated to send the Secretary of State for Energy to prison if they do not meet the net zero commitments, potentially through contempt of court. We take these things seriously, but my right hon. Friend will wish to hear more on that issue from my hon. Friend the Energy Minister.

It is fair to say that the amendment about putting a statutory net zero duty on Ofgem does not need much studying. On the issue of clean, inexpensive energy, Hinkley Point C is now going to cost £33 billion. We know that Sizewell C will cost in the order of £35 billion if that follows, and the existing clean-up for nuclear radioactive waste is in the order of £230 billion, so where on earth does nuclear fit into the definition of clean and inexpensive?

I will make a little progress, and then I will give way again. I just want to say a big thank you to a lot of Members for their work on energy and on considering this Bill, such as the net zero review led by my right hon. Friend the Member for Kingswood (Chris Skidmore); the pre-legislative scrutiny that the Business, Energy and Industrial Strategy Committee carried out on parts of the Bill; the 1922 BEIS Back-Bench committee’s ongoing consideration of the issues we face; and many others in this House.

Will the Secretary of State say a little about hydrogen? As he will know, there is real concern about putting a hydrogen levy on household bills at a time when so many people are already struggling to pay those bills. Will he look again at where to put the funding for hydrogen? Secondly, will he accept that using hydrogen for households—for home heating—is very inefficient? It is expensive, and it brings safety risks. We do need hydrogen for hard-to-decarbonise sectors, but will the Secretary of State rule out using it in homes?

CCUS is very important to me and to my constituency. EnQuest, the operator at the Sullom Voe terminal, sees the next generation of the use of that terminal involving CCUS, but does that not reinforce the point made by the right hon. Member for Reading West (Sir Alok Sharma), in relation to Ofgem’s remit? Does it not sit very nicely with the recommendations that the Secretary of State has received from Tim Pick, his offshore wind champion, who has also made the point that Ofgem’s mandate must be reshaped to bring it into the appropriate framework for net zero challenges? That remit has not been touched since 2010.

By introducing business models, we want to get the advantage of that long-term potential geological storage, with revenues and a potential CCUS industry that could support something like 50,000 jobs, with another 12,000 in hydrogen by 2030. We will also build the market for low-carbon heat pumps to 600,000 installations a year by 2028, and accelerate the transition to ultra-efficient electric heat pumps to reduce our reliance on the volatile global gas market and improve our own energy security in return.

We will also bring forward reforms to test new methods of decarbonising heating, which is where we come back to the hydrogen trials. We will have a first-of-its-kind hydrogen village trial that will convert up to 2,000 properties to hydrogen for heating, instead of natural gas, and repurpose the existing gas network infrastructure for 100% hydrogen. Through that, we can find out about the efficiency, or otherwise, of building a hydrogen heating network. I put on record that I understand there are challenges, which is why we want to test this first.

There is a lot in the Bill that is commendable for improving energy security and decarbonising energy production, but where it is perhaps lacking some ambition is in reducing energy emissions, particularly for homes. We know that poorly insulated homes in particular are expensive, at a time of a rising cost of living, to heat, but we also know that we can do a lot more in this area. Will my right hon. Friend accept amendments as the Bill progresses to improve on the loss of energy and heat and on home energy efficiency?

I have been following the discussions in Whitby in the hon. Gentleman’s constituency and I want to be clear: we have no desire to trial hydrogen with communities that do not want to see disruption. On the other hand, I know that other communities are keen on it. For the reasons already discussed in this debate, there are clearly pros and cons in switching to hydrogen for household heating and it will not be appropriate everywhere. That is why we want to learn from those trials, but it is also important to recognise that hydrogen for industrial use is a different matter. We are feeling our way into all this. Together with what we learn from the H100 neighbourhood trial in Fife, the village trial will provide critical evidence to inform decisions on hydrogen in heat decarbonisation, which will not be taken until 2026.

The second pillar in the Bill will help to strengthen our energy security and minimise cost to consumers. It will pave the way for an independent system operator and planner, or ISOP, whose focus will be on building a better, more reliable energy system. The ISOP will maintain our energy security, operate at the cutting edge of net zero with long-term ambitious plans and bring electricity and gas systems together into a single institution, enhancing our ability to plan for our energy system in the future and to reduce costs.

I want to bring my right hon. Friend back to his comments about energy security. The Bill outlines lots of ways in which that will be achieved, but he will be aware that the vast majority of materials needed for renewable energy are processed in China. Are we not therefore in danger of creating the same situation with renewables as we had with fossil fuels and Russia, and what assessment has he made of energy security in those particular areas?

Secondly, we will amend the Bill to deliver on the support package for energy-intensive industries, protecting them from high electricity prices. This will bring prices for UK businesses in line with global competitors, preserving jobs and investment in the strategic foundation industries—steel and chemicals, for example. Bringing down prices will also remove a barrier to those traditional carbon-intensive industries decarbonising, in some cases by switching to electrification.

The Secretary of State rightly addresses the need to decarbonise and support industries that have been high users of carbon. The Bill as currently amended includes a ban on opening new coalmines, thanks to the Liberal Democrats in the other place. What possible reason could there be for the Government not to support that?

I thank the Secretary of State. The Bill is sending mixed messages across the world, issuing 100 oil and gas licences while not ensuring that renewable energy projects are connected to the grid. On the devolved Administrations, when will the Secretary of State speak to and learn from Wales and the Welsh Government about the project I am proud to have introduced, Arbed, and about upgrading our insulation in homes, creating new skills and tackling the urgent climate crisis?

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18:25 Ed Miliband (Labour)

For us, the central truth that frames this Bill is, as the Secretary of State said in his speech, the energy bills crisis, with bills still double what they were 18 months ago. This crisis demonstrates the urgency of getting off expensive fossil fuels and moving to clean power. Clean power is the route to cheaper bills, energy security, long-term sustainable jobs and tackling the climate emergency. The peril for Britain is the deep uncertainty about whether the Government are doing what is required to make the transition happen with the urgency needed. Let us look at the last couple of months alone. In March the Climate Change Committee stated that the Government are “asleep at the wheel” on their 2035 decarbonisation target. In the same month the National Infrastructure Commission said that

“At the current pace of change, the UK is set to fail to hit its target of decarbonising the power sector”.

The common theme is one we have heard many times about this Government: they act as if this was not the emergency it is. The Bill needs to put that right, so we apply three tests to it: does it represent an all-out sprint for zero-carbon power, the linchpin of a net-zero country; does it provide a proper plan to spread the benefits of cheap, clean power to working families across Britain; and does it provide an industrial policy that means we can win the global race for the jobs of the future? In that context, we will give our support to the Bill, because we welcome many of the measures in it and believe they are long overdue. We have long called for the independent system operator and planner—I will come on to that—as well as the CO 2 licensing regime, because, as the Secretary of State said, carbon capture and storage is important for the future. We welcome measures to support hydrogen, nuclear and action on the grid, and a number of other aspects of what we might call “green plumbing”, which is largely what the Bill is about. We also welcome the improvements made in the other place, for which I thank their lordships. I will come on to those in the course of my speech.

This ban has meant that in the eight years since 2015—the Minister for Energy Security and Net Zero was candid about this earlier this year—just three wind farms have been built in the whole of England. Since 2015, we have had five Prime Ministers and just three onshore wind farms. I make that to be three fifths of the wind farm per Prime Minister—that is my great maths. That is quite the record.

Members across the House will have different views on wind farms, but the cost of the ban— [ Interruption. ] The Minister for Energy Security and Net Zero is chuntering from a sedentary position, but these are his figures, which he said at Energy questions. According to Carbon Brief, the cost of the ban is more than £5 billion. That is £180 per household because of the expensive gas that we are importing when we could be using onshore wind. In future, failing to achieve the doubling of onshore wind deprives us of another 20 GW of power. Any self-respecting energy Bill would lift that ban. Even the right hon. Member for North East Somerset (Mr Rees-Mogg), who is sadly no longer in his place, called for the ban to be lifted when he was briefly Energy Secretary—that was not a glorious time, but he got it right when he argued for bringing that position into line with other infrastructure. In December, in a promise made by the Government, the Communities Secretary said that, by the end of April, the ban would be lifted. We have gone beyond the end of April.

If the regime is to work—I concur with the interventions on the Secretary of State—we need a price regulator in Ofgem that supports and never stands in the way of change. I hope that the Secretary of State’s failure to say that he would oppose such an amendment is a good sign, but obviously Ofgem should have a formal net zero duty. I think that was recommended by the net zero tsar, the right hon. Member for Kingswood (Chris Skidmore), and it was rightly inserted by the House of Lords. However—this is boring but very important—we also need to sort out the issues of planning.

The National Infrastructure Commission recently produced an important report about the delays to planning. It said that, in part, that was the fault of Government, who have not updated their energy national policy statements for a decade. It also said that there should be a statutory duty on the Government to review them every five years, and we agree. Here is the other thing that is important: all relevant regulators, including the Planning Inspectorate, should have a net zero duty, because otherwise we will find the system being slowed down and gummed up. Of course, the views of local people are important and must be taken into account, but we must also make progress.

We also believe—this is an important point—that the Bill should remove the 2015 duty to extract every last drop, the so-called maximum economic recovery, from the North sea. I can do no better than to quote the net zero tsar, the right hon. Member for Kingswood, praised by the Secretary of State, who did a very serious piece of work—Government Front Benchers are nodding. What he said could not be clearer:

“developing new oil and gas fields is incompatible with limiting warming to 1.5°… There is no such thing as a new net zero oilfield.”

Those are not my words, or those of the Liberal Democrats or any other party in this place. [Interruption.] The Secretary of State starts chuntering, but he should talk to his own net zero tsar, who did a brilliant report that he himself praised.

Here is the other thing, which is a new part of this. We now know how much the Government are having to shell out to the oil and gas industry to persuade it to make this investment, because it is in the detail of the Budget Red Book: over £11 billion. The current Prime Minister, the previous Chancellor, introduced a windfall tax, but then he introduced an absolutely massive super-deduction—not available now to any other industry, including renewables—of over £11 billion. Massive, massive cost to the taxpayer, no impact on bills, the oil from Rosebank exported, and driving a coach and horses through our climate commitments—no wonder the net zero tsar concluded that it is the wrong policy for Britain. It is. Government Members can carry on pretending that business as usual is consistent with the science and consistent with what we go around the world saying, but it is not and the net zero tsar has rightly said so. Labour will seek to improve the Bill so that it delivers on the zero-carbon sprint we need.

One great thing in this House, compared with other countries, is that we have established a cross-party consensus on following the science. But the science could not be clearer. That is why 700 scientists wrote to the newspapers a few weeks ago to say, “This is our view.” That is why the IEA says it. That is why the UN Secretary-General says it. That is why the net zero tsar, when he looked at the evidence, said it. It is not me making it up; it is what the clear evidence is. The hon. Gentleman is right that we will continue to use our existing fields, but to grant new licences and new exploration, defying what all the science tells us, would be a betrayal of future generations. I do not pretend it is easy—I do not—but it is absolutely crystal clear. [Interruption.] They say, “More imports.” No, the answer is to get off fossil fuels and drive towards low carbon.

It is Labour’s view that the Bill is necessary but not sufficient given the scale of challenge and opportunity that we face. We welcome many of its measures, which are long overdue reforms that will make the delivery of net zero easier. On the basis of the common ground that does exist, we will work constructively with the Government. The Bill will be useful to whoever is in government after the next election, but for all its length, the truth is that it is further proof that Britain will require a new Government to do what is truly needed to lower bills, give us energy security, create jobs and show the climate leadership that we need.

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18:52 Philip Dunne (Ludlow) (Con)

The Bill is a vital first step in the journey to the vision that the Secretary of State set out in “Powering Up Britain”, but I may disappoint him slightly by saying that it lacks what is really needed: a vision to get us to 2050. We need a 27-year plan to establish how we will drive electricity generation and get it to the places that it needs to go, in order to achieve net zero Britain. I hope that during the passage of the Bill, if additional comments and suggestions are made to the Front Bench, they will take them in a positive spirit in that direction.

The scale of the challenge is enormous. We need five times the current electricity generating capacity to decarbonise our economy, ignoring any increase in GDP during this period. The UK is trying to do that in a globally competitive environment, as we just heard from the right hon. Member for Doncaster North. This is a time in which international investors, whether state-owned electricity companies or financial investors, are looking for the markets to invest in energy generation that will provide them with the quickest route to completion of the deal, whatever kind of a deal that is. One big challenge that the Bill seeks to resolve is removing some of the barriers to implementation and reducing some of the risk. That is where it has a great deal to offer. The key is to provide confidence to the international community and the domestic supply chain that this country knows where it is going, will facilitate the way to get there and will do it quickly.

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18:59 Alan Brown (Kilmarnock and Loudoun) (SNP)

The amendment that would prevent any new coalmines from being opened by the Coal Authority or its successors makes sense if we are serious about net zero. We cannot have the hypocrisy of lecturing developing countries about the use of coal while considering extracting coal ourselves. We cannot have the hypocrisy of Tory MPs’ decrying Germany for using coal while at the same time supporting the new Cumbrian coalmine. We need to end the pretence of a zero emission coalmine that ignores the emissions from the carbon embedded in the coal that is about to be burnt, and we need to end the hypocrisy of arguing for indigenous coal for steel coking in the UK when the coal is generally not suitable for the purpose and 84% of it will be exported to be burnt elsewhere.

As for the amendment to ensure that meeting the UK’s net zero targets becomes a specific part of Ofgem’s general responsibilities, that is just plain common sense. We have heard a number of interventions in support of it, and indeed it is one of the recommendations in the Skidmore review, as well as being called for by representatives of the wider industry including Energy UK, RenewableUK, the Climate Change Committee and the National Infrastructure Commission, and groups such as the Green Alliance. It is logical to assume that, if the Government object to Ofgem’s having a net zero mandate, they are signalling that they are not serious about doing everything possible to meet the net zero target—and when are they ever going to publish the long-delayed strategy and policy statement for Ofgem? For too long they have seemed to suggest that Ofgem should have responsibility for policy considerations when awkward questions arise, when it is clearly their responsibility to set policy decisions for Ofgem in that strategy and policy statement.

As well as the need for grid build-out to facilitate the renewable energy targets, there is a need for the Government—if they want to deploy renewable energy—to listen to what the industry is saying about the pressures of inflation and how it will struggle to meet the strike rates that have been suggested for allocation round 5. Indeed, some of the biggest developers mentioned by the Secretary of State are struggling to deliver on their AR4 commitments. We need to learn from the Spanish auction, which was a complete failure, to listen to industry and to ensure that that failure is not repeated as we try to deploy renewable energy as quickly as possible.

Several bodies, including Energy UK and the Climate Change Committee, have called on the Government to apply a net zero test to all policy, regulatory, spending and taxation decisions. I support that, because I know that we need to move away from silo working and ensure that there is a joined-up net zero policy across all Government Departments. I also think that the UK Government should learn from the Scottish Government’s establishment of a Just Transition Commission to place fairness and long-term job creation and transfer at the forefront of net zero, and I call on them once more to match the Scottish Government’s £500 million just transition funding.

There is no doubt that hydrogen production is needed as part of the net zero pathway. It can provide fuel for shipping, aviation and HGVs, for example. It will be vital for decarbonising some energy-intensive industries. However, there is a growing understanding of the reality of the cost of hydrogen production, which means it is extremely unlikely to be part of a large-scale domestic heating switch-over.

I have previously supported the H100 Fife project, which I want to see come to a conclusion as we need to have an evidence base. However, in reality, hydrogen looks to be too costly and is unlikely to be a solution. Low-carbon expert Jan Rosenow, who was a special adviser to the Business, Energy and Industrial Strategy Committee when we looked at heat decarbonisation, has identified and looked at 36 independent studies that do not predict any large-scale use of hydrogen for heating.

In the here and now, we still do not have certainty over the track 2 timeline. I ask the Secretary of State once again, when will Acorn get the backing it deserves? The Scottish Government’s 2030 targets cannot be met without it. Without further CCS clusters, the UK will miss its own targets as well. It is no surprise that the Carbon Capture and Storage Association has written to the Secretary of State outlining its concerns.

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19:17 Chris Skidmore (Kingswood) (Con)

It is to the issue of delay that I wish to speak today. As the former Energy Minister who signed net zero into law and most recently, as has been noted, chaired the independent review on net zero, I believe the greatest threat to our future ambition to deliver on net zero is the endemic and systemic delay in creating the capacity and capability needed to decarbonise our energy systems. We simply cannot will the means, expecting that because we say we will deliver, net zero will happen. It will not. Unless we address the fundamental challenges of grid infrastructure, storage and capacity, we will not get there.

The net zero review set out how the Government can tackle those delays and implement their climate commitments, both by taking action now—the Bill is a huge opportunity to achieve that—and by providing the certainty, clarity, consistency and continuity of long-term policy direction that is needed to unlock future private inward investment. We can provide certainty in this place by working across parties to build on the long-term political consensus for net zero. Indeed, the Climate Change Act 2008, led by the right hon. Member for Doncaster North (Edward Miliband), has been held up globally as a model for what stable political action on climate change can deliver.

Back then, it was the Conservative party in opposition that pushed the Labour Government to go further, to be more ambitious, in their climate leadership on emissions reduction. Thanks to the actions taken by both parties, and across all divides, the UK is a global leader in the G7, having reduced our emissions further than any other industrialised nation, and we can do the same now.

Although many provisions in the Bill are welcome, we can once again, with cross-party support, go further faster and raise our ambitions. The amendments made in the Lords are all welcome additions. Indeed, many were recommended in the net zero review. I therefore support their continued inclusion and, if needed, will seek to re-table many of them. I will also seek to work across the House, as chair of the all-party parliamentary group on the environment, to table additional amendments that I believe are realistic and achievable to help the Government meet both the needs of the energy sector and their own legal and net zero commitments.

It is in that spirit of cross-party consensus that I believe it is our duty as legislators not only to make this Bill the best it can be, but to ensure that we do not delay any further the reforms that are needed to make our regulatory and planning systems, which are holding back net zero, fit for a net zero purpose.

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19:22 Hilary Benn (Labour)

I support this big, important and complex Bill, but the test we should apply is very simple: will it give us the tools we need to achieve energy security in a net zero future? As the right hon. Gentleman said, we know exactly what needs to be done. We now need to get on and make it happen.

As I said to the hon. Member for Strangford (Jim Shannon), I think we will need all the technologies, in all sizes and colours, to succeed. I do not think it is the Government’s job to pick one or another. The Government’s job is to encourage them all. Where I think the Government have a responsibility is in quickly clarifying how plans to decarbonise home heating in particular places will be pulled together, because with great respect to the new Department, it will not come up with a plan for the city of Leeds and its 800,000 people. The sooner it is clear how the local authority, working with Ofgem, the energy companies and others, will decide what are the appropriate technologies to make the transition, and in which places, the better.

My final point is on the important question of who will pay for this change. My right hon. Friend the Member for Doncaster North (Edward Miliband) made this point in his excellent speech. We cannot have a transition to net zero in which some people end up having to pay, or being asked to pay, huge costs. We all have constituents who can barely pay their gas bill at the moment, and we cannot ask them to pay for the cost of a heat pump, even with one of the Government’s 90,000 grants. Those grants will not convert 23 million homes. Frankly, we are way off the pace when it comes to home heating. That means that when a gas boiler dies, the homeowner, social landlord or landlord will put in another gas boiler because it is currently cheaper than a heat pump.

We have to get to net zero in a way that is fair to people, wherever they live and whatever they do. We cannot lumber them with costs that they simply cannot afford. If we seek to do that, those 23 million homes simply will not be converted. That is why, in this Bill and in many other ways, we need more clarity and more speed. When the Bill completes its passage through this House, I hope it will emerge even better equipped, with all the tools we need to do the whole job.

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19:29 Bim Afolami (Hitchin and Harpenden) (Con)

The first thing we must remember is that we are all on the same side on this Bill; there is huge cross-party support for what we are trying to do. More precisely, we know that for a cleaner, more renewable, cheaper energy system—cheaper for the people we represent—we need to electrify as much as we can and produce that electricity with as much green energy as possible. That includes nuclear power, in order to make sure we have that baseload in place.

We all support moving to a net zero future, but in the transition to that point we are going to need to expand our gas storage and oil refining capacity in this country. The Bill needs to do even more than it already does in that regard. I say that not because I want to burn fossil fuels, but because in the transition to get to the place that we know we need to get to—we can argue about how best we achieve that—if our constituents see their bills going through the roof, the support for the net zero agenda will plummet. So I am concerned about making sure that, as we go through this transition, we keep bills down for our constituents while making the necessary investments for the longer term.

Other Members have mentioned the need to invest in our grid. I believe it was my right hon. Friend the Member for Kingswood (Chris Skidmore) who said that it is ridiculous if we are taking over a decade to plug in new renewable energy into our grid system. I would like more clarity from the Minister and the Government on how, practically, the measures in the Bill will increase the investment in the grid and the speed with which that will happen, because we do not have forever to wait. All of us will hear examples from our constituencies or elsewhere of that huge delay, and all of our strategies and policies do not mean anything unless we can get them plugged into the grid. That requires real urgency and I look forward to the Government explaining more in that regard.

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19:35 Nia Griffith (Labour)

I welcome the Bill, but I must say that I am extremely disappointed by the Government’s paltry efforts on energy to date. It is now a year since the horrific invasion of Ukraine by President Putin, which should have been a brutal wake-up call. Not only do we need accelerated investment in renewables because of the extreme urgency of tackling the climate emergency and ensuring that we reduce our carbon emissions, but Putin’s invasion reminded us of the strategic importance of energy security. We have plentiful natural resources and we can provide ourselves with energy security with wide-ranging investment in renewables. Then we come to the issue of cost, as renewables, particularly onshore wind, are now proving their cost-effectiveness.

So whether it is about tackling the climate crisis, energy security or price, the Government should be making investment in renewables an absolute top priority. Despite the Department’s document citing onshore wind as one of the cheapest and easiest forms of electricity generation, they are still being mealy-mouthed about lifting the ban on onshore wind in England. This bill should include a clear lifting of that ban. We know that business needs certainty in order to invest, and the Bill misses the opportunity to give the onshore wind business that certainty.

Now is a crucial time for industry more widely to be investing in the green technologies of the future. Many industries such as steel and manufacturing face huge transition costs to reach net zero, and they will be making unprecedented investments in new methods of production and new production lines. They will be looking very carefully at which countries offer them the best deal on siting their production lines of the future. Not only is it essential that the Government respond to the game-changing US Inflation Reduction Act, and similar moves by the EU—I do not know why they are dragging their feet, as industry is crying out for information and will simply go elsewhere if it does not get it—but they need to address energy costs.

It is also high time that the Government resolve the problems of the national grid’s lack of capacity with the difficulties and delays in connection. It is vital that we have an effective grid to get energy from where it is generated to the areas of population and industry where it is needed. Not long ago we witnessed the fiasco of electricity generated in Scotland failing to reach consumers in England because of the current lack of grid capacity. But it is not enough to catch up with the present. I know that the Minister for Climate Change in the Welsh Government, Julie James MS, has flagged up the huge quantities of electricity that will be generated by offshore wind in the Celtic sea. She has raised with the UK Government the vital work needed to increase the grid capacity to transmit this energy to where it is needed across the UK. I would be grateful for a categoric assurance from the Minister that increasing grid capacity will be an absolute priority.

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19:41 George Eustice (Camborne and Redruth) (Con)

There is also a wider problem with the current Government strategy. Just before we get to 2026, we can envisage plumbers and boiler engineers across the land going out to people and saying, “If I were you, I would get a new boiler now because the drawbridge is about to come up.” That will probably mean that we will have a surge of investment in boilers at just the wrong time. On top of that, there is likely to be a “mend and make do” approach that will stretch for many years. All of this means that the objective of making carbon reductions, and getting not just to net zero but to our objectives under carbon budget 5, gets potentially further away, rather than closer.

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19:47 Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)

It is a pleasure to speak on Second Reading and to follow the right hon. Member for Camborne and Redruth (George Eustice). Energy policy has been at the forefront of political debate in the UK for many years as policymakers grapple with the challenges that humankind faces with climate change. However, the war in Ukraine and the subsequent huge increases in energy prices over the past year have brought an immediacy to the debate not only from an environmental point of view, but from a social policy point of view. There is general political consensus around the need to decarbonise the UK’s energy system and to vastly increase domestic clean energy generation. There are, of course, differences around the speed of the transition and what technologies to prioritise.

From a Welsh perspective, I would normally use a debate such as this to ask why a country such as mine, which is a net exporter of electricity, a superpower in terms of the percentage of electricity production generated for export—it produces twice our domestic requirements—should suffer from appallingly high levels of household fuel poverty. The latest Welsh Government estimates that I have been able to find puts the figure at 45% of all Welsh households. However, instead of making broader political points in this debate, I want to concentrate on two local issues which I have been dealing with on a constituency basis. One unmistakeable fact facing us on our decarbonising journey is that there will be a requirement to increase electricity transmission and distribution infrastructure capacity significantly. Whether that is infrastructure to transmit electricity from generation sites to the National Grid or infrastructure to distribute electricity to homes to meet the demands of domestic heating and charging the electric vehicles of the future, the impact will be felt acutely in rural areas.

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19:53 Alec Shelbrooke (Conservative)

Much has been said about energy security and trying to get away from the situations we face with Russian gas, fossil fuels and so on, but I am concerned that we are moving into another area of energy dependence on another autocracy or dictatorship, China. I raised this point with the Secretary of State earlier, and he focused on uranium, but that was not what I was getting at. China has sucked up the processing of many of the materials in the world that are needed to make renewable energy. According to statistics put forward by Morgan Stanley, China refines 59% of the world’s lithium, 80% of the cobalt, 69% of nickel sulphate, 95% of magnesium, 100% of spherical graphite, 69% of synthetic graphite, as well as producing 70% of battery cells, 78% of cathodes and 91% of anodes.

Every hon. Member in this Chamber wants to move towards a net zero society, but if we do not do so sustainably, taking the public with us, we will find that harder and harder to do, as my right hon. Friend the Member for Camborne and Redruth outlined with regard to the buying of gas boilers making the situation worse. Recognising that the supply of the rare earth elements that are needed may provide hostages to fortune with countries such as China, I urge my hon. Friend the Minister to look into how the Government can help companies to research and develop hydrogen combustion.

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19:59 Mike Amesbury (Labour)

It is a pleasure to follow the right hon. Member for Elmet and Rothwell (Alec Shelbrooke). Like many across the Chamber, particularly those on the Labour side, I rise to call for a more robust response to the climate emergency. My definition of “emergency”—and, I am pretty confident, that of most people in the Chamber—is to do with getting a move on and doing things at pace. Of course, it has been some considerable time since Parliament declared a climate emergency, yet the Government’s track record has been woeful at times.

My constituency and the surrounding areas have energy-intensive industries such as Ineos-Inovyn; Stanlow, which is just up the road; and Tata Chemicals. Hydrogen can provide a solution in terms of decarbonising at speed—I understand that, and it is recognised in the Bill—but I am fundamentally opposed to hydrogen for use in domestic premises. The evidence is crystal clear. My opposition is based not on emotion but on scientific evidence. A major peer review of 32 independent scientific studies found that none of the pilots and research supported widespread use of hydrogen for domestic heating. Indeed, MCS, a company based in Daresbury, has expressed evidence-based concern as well. The Select Committee concluded the same. The use of hydrogen for domestic use would mean 70% to 80% more on consumer bills, if we look at current gas-based consumer bills, and could result in 45% more gas importation. We should surely be moving away from that. The focus must undoubtedly be on investment in heat pumps—air and ground—for domestic use. That would provide energy at less than half the cost of the current market.

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20:04 Chris Grayling (Epsom and Ewell) (Con)

It is a pleasure to follow the hon. Member for Weaver Vale (Mike Amesbury), but I have a different view from his. It is worth remembering that this country has reduced its carbon emissions very substantially over the last decade—twice as fast, in fact, as the European Union. It is worth remembering that when we say that we are not making progress. There is an awful lot to do, as we have heard, and we cannot rule out any options, so legislating against a particular technology is not where the Government should be. We have to be technology-neutral. Frankly, we will need all options if we are to get to net zero; we cannot simply rule out one or the other. We will have houses heated in one way and others in another way; we in this House cannot simply take the decision to blanket refuse a particular approach.

There are things that we should encourage. Frankly, I cannot see why we do not put in place robust rules on building solar into every new building—particularly every new commercial building. We can do things that do not close options but take us a step down the road. The Government should be taking such measures, but they probably fall into the pot of the Department for Levelling Up, Housing and Communities rather than that of the Department for Energy Security and Net Zero.

I will focus in particular on an area of energy that has been touched upon only briefly in an intervention: the whole issue of aviation fuel. If we are to achieve net zero, we need an aviation industry that also moves rapidly towards net zero, and that is not an easy task. It is a particularly difficult task for the aviation sector because the technology is not yet there to make significant progress in that direction. But it is getting there, and we have to do what we can to encourage it, because the aviation sector is hugely important to this country. Both sides of the House have agreed in the past that its importance needs to be supported and protected. That was noted in particular when we voted on the expansion of Heathrow airport: the vast majority of Members supported the industry on that night. We have to continue doing so while accepting that the industry has to transform itself. It cannot simply stand outside the plans to deliver net zero; it has to change.

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20:12 Caroline Lucas (Brighton, Pavilion) (Green)

I appreciate that hon. Members want to demonstrate cross-party support for net zero. Yes, by and large, we agree about decarbonisation, but sadly we do not agree about the speed of that process. The UK has a responsibility to go much further and faster than most other countries because we are disproportionately responsible for the cumulative emissions that are already in the atmosphere.

We were the first country into the industrial revolution—the fossil-fuel industrial revolution—and we need to be the first country out of it. I have not heard enough urgency from Members on either side of the House about that this evening. Winning slowly on this issue is the same as losing. The bottom line is that there can be no new exploration for fossil fuels if we are serious about doing our fair share to avoid the worst of the climate crisis. The report by the United Nations environment programme on the production gap states clearly that

What is most striking about the Bill is its failure to wean us off fossil fuels—the very thing that is choking our planet and driving high energy prices. I endorse the Lords amendment on the prohibition of new coalmines. It was simple in its drafting but vital in its importance. The Minister will no doubt note that it does not only cover coal for energy; it covers coal in its entirety, extending its reach to the newly approved Whitehaven coalmine—and so it should, because that stranded-asset coalmine would produce vast amounts of climate emissions. It is neither wanted nor needed by the UK steel industry, and it is not wanted in Europe, which is rapidly moving towards green steel. I urge the Government to retain the amendment to the Bill.

We need to go much further than that, and reduce our wider reliance on all fossil fuels, not just coal. As a first step, that must involve a review of the outdated and dangerous duty to maximise the economic recovery of petroleum from the North sea. It is beyond imagination that at a time of climate crisis we still have on the statute book an obligation to maximise the economic recovery of oil and gas. We need to move away from that. We also need to move away from the extraordinary position on the so-called windfall tax.

I am listening to the hon. Lady’s speech with great interest, and want to pick up on one part of it. On moving away from maximising economic recovery, does she agree that we are already less than 50% dependent on our own domestic sources of oil and gas? Does she agree with the Climate Change Committee’s assessment that our dependence on oil and gas will decline more slowly than our ability to replace it, so we will become more dependent on imports? What she has recommended will not stop our use of oil and gas—it will just make us more dependent on imports.

I was about to talk about the windfall tax and the gaping hole that allows corporations to claim £91.40 for every £100 invested if—perversity of perversities—they reinvest that money in yet more oil. This comes at a total cost to the taxpayer of nearly £11 billion—enough to give an inflation-matching pay rise to every NHS worker and teacher for a year. Instead, the North Sea Transition Authority should have a duty to help meet the UK’s climate commitments and deliver a managed and orderly phase-down of UK petroleum. This, of course, must come with a requirement to support a just transition for oil and gas workers and communities—a clear pathway coupled with financial support to enable them to move into green jobs. Crucially, we need to see no new licences, which means that Ministers must give up any idea of giving a green light to projects such as Rosebank, the UK’s largest undeveloped oil field, which would produce more emissions than 28 low-income countries combined. That would be the definition of recklessness.

which is a worthy aim. I very much hope the Government listen to hon. Members on both sides of the House who have talked about introducing a new duty on Ofgem to abide by net zero requirements. The amendment on that tabled in the other place received cross-party support, and I cannot see why the Government would not want to make sure that we retain that.

In the very few moments that are left I want to say a few words about nuclear. Government support for this nuclear white elephant, formalised by the Bill, is beyond ludicrous. We have already discussed the cost of nuclear—it is massively expensive and going up in price—but it is also massively slow. The Government have accepted the goal of decarbonising the UK’s power system by 2035. Given that it will take eight to 10 years to produce new nuclear, it will make absolutely no difference to that decarbonisation target. It is too expensive, too slow and it needs to come out of the Bill.

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20:19 Dame Maria Miller (Basingstoke) (Con)

It is a pleasure to see you in the Chair, Madam Deputy Speaker. I rise to support the Bill. I was hoping to hear from the hon. Member for Brighton, Pavilion (Caroline Lucas) a few more of the positive things that this Government have achieved, which are important to acknowledge, so that people can see that progress has been made, not least the fact that half of all our electricity is now generated from renewable energy sources—something we could be forgiven for missing in her speech.

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20:26 Justin Madders (Labour)

I would like to talk a little bit about the hydrogen village trials and the experience of the process in Whitby, because it has told me—and, indeed, this debate has highlighted—that it is not at all clear that we have the answers yet to how to reach net zero in home heating. Without that certainty, we do not have a hope of persuading people that the disruption, inconvenience and expense they will face is a sacrifice worth making to possibly at some point in the future reach net zero. I say that knowing that the vast majority of my constituents are persuaded of the urgent need to tackle climate change, as am I.

We may have already learned the most important lesson, which is that if we do want to decarbonise the domestic energy market, technological change cannot simply be done to people. The Government need to decide which technologies they want to prioritise and then take a lead in persuading people that the choice being made is the right one, both for the individual and for the planet. However, when that choice is made, I ask them to please make sure that they have as many answers to the questions as possible, because my constituents know that, at the moment, the Health and Safety Executive has not signed off the use of hydrogen in the trials. They know that the energy needed to create green hydrogen is currently far greater than that which would be needed for other renewable sources. They know that it will cost them more, and that up until now 37 independent studies have shown that hydrogen is unlikely to play a significant role in home heating.

In conclusion, hydrogen certainly has a role in industry. It probably has a role in transport too, but in the home that role seems far less certain. The uncomfortable reality is that we have yet to find the panacea for decarbonising home heating. Moving to unproven, uncertain technologies is not going to wash with the public, especially when they are being asked to make a significant sacrifice, and always when they are not going to be given any choice. Given the money that has been spent so far on persuading people of the merits of hydrogen in the home, the fact that I and the majority of my constituents are now more sceptical about it, not less, should give everyone food for thought about whether this whole exercise is really just a case of selling ice to Eskimos, and whether it needs to continue at all. I believe that Cadent has been given more than enough opportunity to demonstrate that these trials could be a good thing, but it has failed to take that opportunity. That is probably because, at the end of the day, this experiment just does not stack up, and the idea that my constituents would end up paying for it through a hydrogen levy just adds insult to injury.

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20:32 Elliot Colburn (Carshalton and Wallington) (Con)

One area I would like the Government to look at further is future-proofing district heat networks. Many of them are future-proofed by their very nature, but for those that are heated by incinerators, such as the one in Hackbridge, I can see a glaring problem coming down the line. The Government outlined in their waste minimisation strategy that they want to phase out incineration as a form of dealing with waste. All of us across the House support the reduction and stopping of incineration as a form of dealing with our waste. Incineration is only slightly better than landfill—only very slightly. It is not a net zero-conducive form of waste management, as we rely on creating waste to feed it.

The problem we can see in estates such as New Mill Quarter is that we will have an incinerator that becomes less and less needed as the years go on. We then have two options: either we have to import waste to feed the thing and keep the heating going, which obviously is not conducive to any net zero ambitions; or the thing has to be turned off, and what happens then? That entire estate was new build, built specifically with the infrastructure to deal with the incinerator. I might be long dead by the time it happens, but the problem is coming, and we should not leave it to a future generation to solve. We should look at future-proofing that now.

I am interested in what my hon. Friend is saying about heat networks and wonder whether he might agree with something I have learned just recently. It is a proposal from a stakeholder who deals in renewable energy, including hydrolysis to create hydrogen. That generates a lot of heat, and their suggestion is that we declare heat as a utility in a wider form. Would that help his purposes?

My hon. Friend is absolutely right, and it relates to a point that a number of colleagues have made today: we cannot mandate the use of one technology or a very small number of technologies; we need to have that collective option. I urge the Government to err on the side of caution because, under their own ambitions, district heat networks could account for something like two fifths of the UK’s heat provision. Given the problems that have existed in Hackbridge and across multiple estates, and not just in London, I urge the Government not to put all their eggs in one basket by relying on district heat networks as a singular answer. I agree with my hon. Friend. There are plentiful supplies of renewable energy out there. We need to make sure that we are neither mandating nor preventing the use of any one. We should be using all those potentials to reach our net zero ambitions and provide more domestic energy security.

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20:39 Wera Hobhouse (Liberal Democrat)

Our biggest task worldwide is to get to net zero. We must transform our entire energy system. The Liberal Democrats welcome many of the Bill’s proposals. However, it is simply not ambitious enough. We need bold action now to protect consumers from spiralling costs and to put us on the path to net zero.

The best way to reduce energy bills is to move harder and faster towards renewables. However, a lack of grid capacity is seriously holding back renewable energy projects. Many face delays of up to 15 years. In Wokingham, for example, the Liberal Democrat council has been told that its first ground-mounted solar farm project will only be connected in October 2037, a decade later than originally promised. How can we decarbonise our power system by 2035 when ready-to-go renewable projects cannot get the grid connection they need?

Britain will have to build seven times more transmission lines in the next seven years than it has built in the last 20. This huge task will require a major change in approach by the regulator. Ofgem is not empowered to consider the benefit of long-term investment, as its remit focuses on short-term costs to consumers. This is a major reason behind the lack of grid investment. In the other place, an amendment was agreed to give Ofgem a specific statutory net zero objective. I urge the Government to keep this provision in place.

The Bill, as amended, also now contains a ban on opening new coalmines. Less than two years ago, the Government announced that they were leading an international effort to end the use of coal, yet soon afterwards they gave the greenlight to the Cumbria coalmine, a gateway to allowing more fossil fuels in the UK and flying in the face of our net zero commitments. The Government must ensure that this ban on new coalmines remains part of the Bill if they are to retain a shred of credibility on climate action. Huge changes to people’s lives will be required to get to net zero. We must bring people on board, or there is a risk that people will not accept the necessary changes, making our progress to net zero more lengthy, costly and contested.

Another disappointment is that the Bill does not contain provisions to cut flaring, venting and leakage of methane from gas and oil platforms. Methane is a potent greenhouse gas, with 80 times the warming effect of CO 2 . It accounts for 13% of global greenhouse gas emissions. The UK has signed the global pledge to cut methane levels by 30%, and a ban on oil and gas flaring and venting in the North sea would dramatically reduce methane emissions. It is supported by the Environmental Audit Committee and the Government-commissioned independent review of net zero. We must mandate monthly leak detection and repair activities. The North Sea Transition Authority must identify and publish a league table of the best and worst performing companies, so that methane emissions can be publicly monitored. We can reduce methane waste by 72%, but the Bill is currently silent about that and needs amending. We still have much to do to protect consumers and reach net zero. The Bill, although substantially improved in the other place, still does not go far enough. As it passes through this House, we must ensure it does not become a missed opportunity.

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20:45 David Duguid (Banff and Buchan) (Con)

I will not go through every part of the Bill as time will not allow—in fact, time probably will not allow me to go through the topics I wish to try to talk about, so I will get on with them. Oil and gas has been spoken about already, but the “inconvenient truth”, to steal a phrase from former Vice-President Al Gore, is that we are not going to get to 2050, keeping the lights on, homes warm and the economy moving, without oil and gas, albeit at greatly reduced demand. It therefore stands to reason that we will not get to net zero by 2050 without carbon capture, usage and storage, and I want to talk about the Scottish cluster in particular.

The Climate Change Committee’s ambitious net-zero pathway profile predicts that demand for oil and gas will decline at a slower rate than domestic supply. It is hugely important that we are able to access our own domestic supplies to meet that continuing, albeit declining, demand. It is also hugely important, as the Minister knows, that the industry is adequately engaged through the passage of the Bill. Oil and gas companies, and their employees, skills, technology and expertise, stand ready to help the Government and this country not only to deliver our energy security needs, but to invest and drive the energy transition that, as should have been said, is at the centre of the North sea transition deal that was signed between the Government and the oil and gas sector in 2021.

The industry and Governments must continue to work together to make the most of our homegrown industry and supply chain in which, crucially, most of the 200,000 oil and gas jobs in the UK exist. With that in mind, I reinforce calls that I know the Minister has already heard from the industry through the trade body Offshore Energies UK. In the immediate term, we need to introduce a clear mechanism, or announce what such a mechanism will be, by which a trigger or a floor price ensures that the 75% tax rate is applied only to company profits that are earned from the excessively high market price environment. In the medium to long term, we must legislate for an effective decarbonisation investment allowance that allows for decarbonisation expenditure, which is essential to delivering the UK’s net-zero ambitions and North sea transition deal emission targets. There are longer-term requests, of which I am sure the Minister is aware.

A huge part of our decarbonisation effort is this Government’s strategy to deliver up to 30 megatonnes of carbon capture and storage by 2030. I welcome the Chancellor’s announcement in the spring statement of £20 billion to help deliver at least that commitment of four CCUS clusters in the UK by 2030, and more beyond that. The £20 billion is for 20 years, from this year. Last month the launch of track 2 of the cluster sequencing process was widely welcomed by industry stakeholders and project developers alike. That includes the Acorn project in my constituency, and the Scottish cluster more generally. Despite continued efforts to downplay the status of that project by SNP Members and Members of the Scottish Government in particular, work on that project has never stopped. In fact, more than £40 million of UK Government money has been directly invested into the Scottish cluster, compared with £80 million promised by the Scottish Government and then withdrawn, with clarity not provided on exactly where that £80 million has gone.

As I said, the sector is impatient to get on with the work to be done on energy security and decarbonisation. Speaking for not only the Scottish cluster but CCUS more broadly, the announced streamlined approach to track 2 is very much welcome, but, as I am sure the Minister realises, even more welcome would be a clear and rapid process for rolling out track 2 clusters, building on the lessons learned from track 1. For example, it would be extremely helpful to award initial capture projects swiftly—and concurrently, if possible—with transport and storage licences. May I also ask for the inclusion of shipping and other non-pipeline transport of emissions, bearing in mind that most centres of industrial activity around the UK do not currently have clarity on what their pathway for decarbonisation will be?

Finally, on CCUS, given direct air capture’s current absence from the Bill as a carbon capture entity, will the Minister clarify what role that will play? Will it need to be included in the context of the appropriate clause—I think it is clause 63—of the Bill? If the Government cannot table that amendment, would it be helpful for me to table such an amendment, as others have offered? I am sure we can discuss that in more detail as Committee approaches.

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20:51 Ben Lake (Plaid Cymru)

Looking beyond next winter, I think Members will agree that the Bill offers a golden opportunity to step up investment in the energy efficiency of our housing stock. In the long term, reducing our energy demand represents one of the most important contributions to forging a more resilient and sustainable energy system, helping to permanently slash energy bills for both households and businesses alike. I have previously called for the £6 billion for energy efficiency measures, committed in the autumn statement, to be brought forward. The spending profile should be brought forward as much as possible. The more we can prioritise the investment of energy efficiency, the better. As chair of the all-party parliamentary group on fuel poverty, I emphasise that point and, in doing so, ask that the Government consider setting clearer pathways for improved energy efficiency standards for our housing stock.

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20:58 Alexander Stafford (Rother Valley) (Con)

The past winter has epitomised the uncertainty felt across the country about our energy future. However, the Bill will restore certainty and help to deliver energy security and net zero targets, because it will help to unleash our hydrogen potential. Part of the uncertainty for our constituents is a concern about everyday essentials, such as, “How do I clean my home?”, “Do I need a heat pump?” and, even, “What is a heat pump?” Green hydrogen blending uses the same pipe and boiler system already in our homes and is by far the simplest way of cutting our carbon emissions from heat, which currently run at nearly a quarter of our carbon dioxide output. I am convinced that green hydrogen can play a part in decarbonising heating, but I know, as we have heard today, that many across the House and the country are not so certain. That is why the trials that the Bill supports are so important. The point is to allow Government, businesses and, most of all, our constituents, to decide if it is a viable path to decarbonising heating. It is essential that the Bill pushes forward those aspects.

Businesses, too, need certainty that hydrogen will not fall by the wayside. The UK has been a world leader in hydrogen. The hydrogen strategy and last year’s update clearly envision us regaining that title. But policies such as the Inflation Reduction Act and the Net-Zero Industrial Act mean that the US and the EU have become more fertile ground for hydrogen innovation than the UK. Businesses need certainty to invest in hydrogen, knowing that there will be a thriving hydrogen economy for production, storage, transport and use. That is why I am delighted that the Bill will unlock billions in private investment through contracts and business models, not only securing our energy future but bringing jobs and wealth across the country. Although there are concerns about the cost of the schemes, I know that every pound spent on hydrogen today means two pounds or more off energy bills tomorrow. That is surely an easy calculation to support. The provisions in the Bill will boost the UK’s hydrogen economy, and I am glad the Government are, at last, being proactive in this space.

Although the Bill goes a long way, we must go further on hydrogen. It will be the glue that binds our green energy future together. It is a Polyfilla energy, helping to fill the cracks between other sources and plug the holes left by carbon-based energy. It will prove an invaluable tool for tomorrow’s energy mixture. The more we encourage it today, the better. For that reason, I urge the Government to push further and legislate to become the torchbearer for global hydrogen. For a start, although I am glad that community electricity producers will now have the certainty and support that they need to flourish, the provisions in the Bill exclude small-scale hydrogen production, which can be used as storage or directly as an energy source. Will the Minister look at widening those clauses to include all low-carbon energy suppliers?

We can do more to ready ourselves for hydrogen heating. We can require new boilers to be hydrogen-ready by 2026, which will bring down prices to normal levels, provide certainty to manufacturers and smooth the transition towards blended heating systems. What better way of preparing ourselves for clean heat. I call on the Minister to re-examine the case for hydrogen-ready boilers. That will be a shot in the arm for UK manufacturers. Furthermore, although the Government’s dedication to hydrogen is welcomed by all, or by most anyway, there must be enough green hydrogen. Current estimates forecast that we will need about 10 times the hydrogen that we currently produce to reach net zero by 2050. The Government have already kickstarted UK hydrogen by doubling our production target. Will they do that again? Will there be certainty for all the hydrogen that we need? We need to increase and support hydrogen production.

It will be obvious to the House that I am certain that there is no green future without hydrogen, but thanks to the Bill and the certainty that it provides to our constituents, businesses and investors, I believe that the Government agree. I know work will be planned to incorporate some of the suggestions I put forward today, but the Bill goes a long way to creating the certainty in hydrogen that we need. However, we must go faster. We used to be the world leader in hydrogen production and manufacturing, whether from buses such as Wrightbus or diggers such as JCB. All across the sector, we need to go further and faster with hydrogen. It is not the silver bullet to all our net zero needs but it is the Polyfilla that will make sure that, when other areas fail, hydrogen will step in.

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21:04 Alex Cunningham (Stockton North) (Lab)

Ministers have said that there is no way for us to achieve net zero without carbon capture and storage. The target set by the Government is to capture and store 20 to 30 million metric tonnes of carbon dioxide a year—including removals—by 2030, but while that is welcome, I personally believe that there could be an even higher target to benefit our country. The Carbon Capture and Storage Association says that the UK’s CCUS project pipeline would be able to store some 70 million tonnes of CO. The industry is ready to deliver, and we need to let the industry get on with it.

I have been banging the drum for CCUS deployment for quite some time now. Support from the Government has been shaky in the past, with several false dawns—funding whisked away, or not provided at all—so I am pleased to see what looks like real progress, although today’s delay in planning permission for our Teesside project is a worry. Teesside is a vital area for the net zero agenda. Its proximity to offshore wind sources and its cluster of energy-intensive industries that require decarbonisation make it a good location for hydrogen production and carbon capture. I was certainly pleased when the Department selected a handful of carbon capture projects on Teesside to progress to the next stage of development, but I was very disappointed that of the 40 longlisted projects only eight are going forward. and that many in the east coast cluster, including one in the Humber, are missing out. What, I ask the Minister, will happen to them next? That said, I welcome the Government’s statement that the Bill

I know from speaking to industry representatives, especially those in the Teesside cluster, that investors see the timely passage of this legislation as critical to maintaining confidence and momentum in the sector after a decade of those false dawns and U-turns. Representatives of the Chemical Industries Association tell me that their sector also wants the Bill to be passed, pointing out that, while it is imperfect, it contains some fundamental provisions. They say that it will give the sector certainty, including the provisions relating to hydrogen and CCS business models, network charges and Ofgem's remit to include net zero, and they like it. Essentially, however, they are asking for a net zero energy transition at the lowest possible cost, creating competition in the energy market to minimise the risk of domestic and non-domestic consumers’ picking up the cost. How, I ask the Minister, will that be delivered?

Of course, the quickest, cheapest and best answer for our national energy security is a clean energy sprint. New renewables are nine times cheaper than gas. They would not only fight the climate crisis but increase our energy security and sovereignty, bring down bills, and create jobs. However, at this crucial moment for our country and our planet, the Bill does not provide the clean energy sprint that we need, so perhaps the Minister could tell us why the ban on onshore wind—the cheapest, cleanest, quickest energy available—remains. Furthermore, the Bill does not deliver the “green plumbing” measures that are necessary to accelerate the deployment of low-carbon power and grid management, failing to solve the grid connection problems, leaving our planning system unreformed, and failing to add a net zero duty to relevant regulators such as Ofgem. It is certainly not the complete answer to all our needs.

A number of amendments to the Bill were introduced by the Lords: moving the hydrogen levy away from customer bills; establishing a net zero duty for Ofgem; banning new coalmines; introducing a local electricity Bill; and mandating reporting on EPC standards for homes. I trust the Government will welcome those amendments. I will also support further changes, such as ending the onshore wind ban, banning fracking, expanding targets on the energy efficiency of homes and dealing with grid connection delays.

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21:10 Greg Smith (Conservative)

Not only are these things horrendously expensive, but for many rural homes they just will not, and never will, work. The Government’s own data shows that some 20% of off-grid households simply cannot use them. Many rural or older homes, built out of stone, cob or “Whychert”, which is unique to the Vale of Aylesbury, are less energy efficient, more expensive, more difficult and, in some cases, impossible to insulate. It is essential that the Government drop ambitions to ban people from using systems that actually work for their homes. Instead, they should ensure there is the best variety of choices available to households to choose how to decarbonise in a way that will not leave them broke, indebted and cold.

This is about developing new fuels for what we already have, not spending billions of pounds on reinventing the wheel, or at least that which makes the wheels and propellers turn. Perhaps such fuels will even be the saviour of the road car as we know it, as even the European Commission is proposing to allow e-fuels in combustion engines after its zero emission cut-off date in 2035.

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21:16 Peter Aldous (Waveney) (Con)

I will briefly go through some of the initiatives that are needed to provide the clarity and certainty everyone seeks. First, a duty is needed for Ofgem to consider net zero. It is vital that we keep costs as low as possible for consumers, but expanding Ofgem’s remit to include net zero would unlock more anticipatory investment, which would enable grid reinforcement. This is currently particularly important in East Anglia.

Fourthly, we need to remove the obstacles that currently block community energy schemes from realising their full potential, and I thus urge the Government to give full consideration to retaining clauses 272 and 273, which were introduced by amendments in the Lords. One of the great challenges of transforming our energy system is that so many people and communities feel as if something is being done to them—as if a burden is being imposed. Community energy schemes enable local people to be part of the solution by participating in the benefits, thereby showing that we are all in it together. As we have heard, hydrogen will be crucial to achieving net zero, and locally, in East Anglia, it has a key role to play. It is very much the new kid on the block. We do not yet know the precise role it will play and, as we have heard, there is a dispute as to who will pay the hydrogen levy. Different views are being expressed on that and it is necessary to consider carefully how best to proceed.

In conclusion, there are many issues the Government need to clarify, but it is vital, as Energy UK points out, that this Bill is passed with the utmost haste. The pressing need for reasonably priced electricity, for enhanced energy security and to meeting the challenge of climate change head on, together with the opportunity to create exciting and sustainable new jobs in coastal communities such as the one I represent, means that there is no time for delay.

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21:21 Selaine Saxby (North Devon) (Con)

The Bill is a crucial piece of legislation for delivering a cheaper, cleaner energy system and increasing investment in clean energies. As the new Department is named the Department for Energy Security and Net Zero, one hopes it will deliver on both. I do not need to rehearse the challenges we face in respect of how being overly reliant on imported gas has created higher energy prices. Much more needs to be rapidly done to improve our energy security. If we create the right legislative framework, and invest in renewable and sustainable energy supplies, we should ensure that we also achieve the goal of moving towards net zero.

There is much to welcome in the amendments from the other place. In particular, I wish to speak to clauses 272 and 273, formerly in the Local Electricity Bill, which are backed by 318 MPs, including 125 Conservatives. These measures seek to enable community groups to sell electricity to local customers. It is still bewildering to me, as someone who lives somewhere sunny, windy and with a huge tide, why this has not progressed sooner. Clause 272 sets up a community and smaller-scale electricity export guarantee scheme to provide a guaranteed income for the electricity from small-scale renewable energy generators with a capacity below 5 MW. Surely, with dramatically rising energy prices and a system still reliant on fossil fuel imports, new local, secure, low-carbon generation must be desirable.

We are seemingly keen to subsidise this polluting form of energy at a time when I am sure we are working towards net zero, yet there seems to be far less subsidy for some of the genuine renewables that we could make use of, for instance right here in the Celtic sea—I declare an interest as chair of the Celtic sea all-party group. But this year’s contracts for difference auction is expected to deliver less than half the renewable capacity we need to hit our 2030 offshore wind target, all due to an administrative strike price not keeping pace with rising supply chain and financing costs and a Department that said that it did not believe the industry’s figures.

As the Crown Estate gets ready to launch its next leasing round in the Celtic sea, aiming to catch 4 GW of floating offshore wind, I hope that we will be able to help get these floating offshore wind turbines out to sea rather than subsidise the burning of trees to secure our future energy supply. It is inconsistencies such as this that make me support new clause 271, which would place a duty on Ofgem to consider net zero. Investment and subsidy decisions would hopefully then ensure that the true environmental impacts of the energy produced were considered.

We should be able to support community energy generation given the abundance of renewable energy sources, particularly in the rural south-west. We must focus scarce subsidies on fuels that are truly renewable and work to harness the wind in the Celtic sea, which, in turn, will support the UK’s longer-term energy security strategy.

There is much to commend in the Bill, but I hope that Ministers will look favourably at these amendments and recognise that, while energy security is vital, we also need to work towards net zero. Frankly, though, some of the current subsidies risk delivering the opposite outcome.

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21:27 David Johnston (Wantage) (Con)

I wanted to speak in this debate for three reasons. First, like every Member of this House, I am sure, I would like to see an energy system such as the Government are seeking to create—one that is more resilient, keeps cost down and keeps us on track for our net zero aim. The Government have spent a huge amount of money paying the equivalent of half the average household’s energy bill, which has been very welcome given what Putin has done to weaponise energy supply, but it is clearly an unsustainable position for the country to be in. Although we have made great strides in cutting emissions—cutting them by more than 40% and cutting them faster than any other country in the G20—we have more to do on our energy system.

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21:32 Duncan Baker (North Norfolk) (Con)

We know that the Energy Bill will make provision to secure our energy production and regulation, instead of subjecting the UK to volatile international markets, but a transition to hydrogen is also estimated to deliver 12.9 million tonnes of CO 2 reduction. Not only will that provide us with 25% of what is needed to reach net zero, but the economic situation must not be overlooked. Importantly, it will generate up to £11 billion in private investment and more than 12,000 new jobs by 2030.

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21:36 Dr Alan Whitehead (Southampton, Test) (Lab)

My hon. Friend the Member for Stockton North (Alex Cunningham) spoke strongly about carbon capture and storage, about the importance of CCS in the Teesside industrial cluster, and about the importance of ensuring that the industrial clusters can play their role in CCS as they develop further,

Finally, the right hon. Member for Kingswood (Chris Skidmore), author of the net zero report, spoke enormous sense about delays being the biggest threat to net zero in future. He supported the retention of Lords amendments to the Bill, as did many other hon. Members, on community energy changes and other things that are part of the Bill that we are debating in the Commons.

Yes, I am happy to acknowledge that that is an important issue in the transition to net zero for the oil and gas industry, and that it is ripe for further legislation to outlaw it in the not-too-distant future.

The Opposition have some serious differences with the Government about how to go about those changes, but we acknowledge and support the generality of those “green plumbing” measures, not least because their establishment will undoubtedly help the new Labour Government greatly as we embark on our far more ambitious programme of energy decarbonisation and energy efficiency from 2024 onwards. Indeed, one of our substantial criticisms of the Bill is how long it has taken for us to get to the point of establishing the legislation that will guide the next stages of our energy decarbonisation.

As we have heard, the Bill has been with us for 10 months in its almost finalised form. Yes, the Government have sought to add amendments to the Bill in another place, and there will be further amendments in the Commons, but the measure could have been on the statute book many months ago—and time is of the essence in getting going with the next stages of decarbonisation. Instead, last autumn we were treated to the spectacle of the then Secretary of State for Business, Energy and Industrial Strategy pulling the Energy Bill from its established progress after just two sessions of debate, and sitting on it for over three months for no apparent reason while the legislative process stalled completely. That led to the remarkable situation of the Opposition writing to the new Minister during that period of stasis demanding that the Bill be recommenced as soon as possible. I know about that because I was the person who wrote the letter. [ Interruption. ] Indeed, I did a very good job there.

There are many areas where we can say, “Yes, but” to this Bill and put forward the measures that will enable it to rise to the challenge of decarbonisation in a comprehensive way. That is why we will embark on that task as the Bill goes into Committee by tabling the amendments that will make the Bill so much more robust for the challenge of the future, and we hope the Government will be receptive to those proposals. That process has been started, with a number of very well-thought-out additions made to the Bill in the other place on Ofgem, hydrogen, coal, community energy and home retrofitting. We will seek to defend those changes in this place, and we hope the Government will see the wisdom of them and not seek to overthrow them.

Labour has an ambitious low-carbon energy programme for government, with a fully decarbonised power system by 2030, including a doubling of present onshore wind deployment; a grid that is fit for enabling and delivering a low-carbon economy; Great British Energy, an investment company that can do so much to speed the energy transition along; a massive programme to retrofit 19 million homes over 10 years to reach our energy efficiency targets; and serious planning of the energy transition, so that it is a just transition both in the North Sea and elsewhere. All these plans will benefit from many of the measures that are in the Bill, but they could be so much more supportive, and that is why we want to see an extended and more robust version of the Bill on the statute book as soon as possible.

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21:47 Andrew Bowie (Conservative)

Let me remind the House why the Bill matters: it is a critical part of securing the clean, inexpensive energy that Britain needs to prosper. It will do that by leveraging investment in new technologies and by securing clean home-grown industries that can reduce our exposure to volatile gas prices in the long term. We are already world leaders. We have reduced emissions more than any other country in the G7, but this Bill will allow us to go further. It will enable reform of our energy system. It will protect consumers from unfair pricing, and it will make Britain an energy-secure net zero nation.

My hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) and others raised issues about the independent system operator, or the future system operator. To be clear, the independent system operator and planner will be an expert, impartial body with responsibilities across both the electricity and gas systems to drive progress towards net zero while maintaining energy security and minimising costs for consumers. We are confident that we have struck the right balance on that issue.

My right hon. Friend the Member for Camborne and Redruth (George Eustice) raised the issue of renewable liquid heating fuel. Decarbonising off-gas-grid properties is a key priority for this Government. I was pleased to meet with my right hon. Friend recently to discuss this issue, and I look forward to working with him and others on ways to ensure that the transition to clean heat will be fair and affordable for all. As we must acknowledge, however, sustainable biomass is a limited resource. Policy decisions on the role of biomass in heat will need to reflect the outcomes of the forthcoming biomass strategy, which is due to launch later in 2023.

I will write to my hon. Friend on that specific issue immediately following the debate, once I have the answer from both the Department for Transport and the Department for Energy Security and Net Zero. However, we are committed to implementing the recommendations in the report. It is a policy of the Department for Transport, but I will discuss the matter with officials in that Department.

Many Members raised community energy schemes, which I strongly agree have a role to play in tackling climate change. While it would not be appropriate to mandate suppliers to offer local tariffs, and this should not be a commercial decision for suppliers, I reassure the House that my officials are actively looking into what further support we can offer the sector. I have already met, and I am sure will meet again, my hon. Friend the Member for Wantage (David Johnston) to discuss how we can work together to move that forward.

On offshore wind, again where we are leading the world, the offshore wind environmental improvement package in the Bill will support accelerated offshore wind deployment and reduce consenting time while protecting the marine environment. A number of Members made broadly supportive comments on the UK’s nuclear sector, although, as is to be expected, not those on the SNP Benches. New nuclear has an important role to play in reducing greenhouse gas emissions to net zero in 2050, but we have always been clear that any technology must provide value for money for consumers and taxpayers. Great British Nuclear will address constraints in the nuclear market and support our new nuclear builds as the Government work to deliver our net zero commitments.

I could not finish without referring to my constituency neighbour but one, my hon. Friend the Member for Banff and Buchan (David Duguid). I agree with him on many issues, and he is absolutely right in his comments on oil and gas. The transition to non-fossil forms of energy cannot happen overnight, as recognised by the independent Climate Change Committee. While we are working to drive down demand for fossil fuels, there will continue to be UK demand for oil and gas, and we will be net importers of both.

I thank Members from all parts of the House who have contributed to today’s debate. I have tried to address all the points, and I apologise that I have not addressed every point. I will write and offer meetings to those to whom I have not responded. I am encouraged by the broad support for this Bill and look forward to continuing my engagement with Members in our many Committee sittings and beyond. The measures that this Bill contains will not only determine our future energy security, but will shape our environmental security, consumer security and economic security. As my right hon. Friend the Member for Ludlow (Philip Dunne) said at the beginning, we cannot ever be at the mercy of autocrats. That is why we now have a dedicated Department for Energy Security and Net Zero. It is why we will deliver the reliable, affordable and clean energy that are needed to power energy’s future under the next Conservative Government and beyond. I therefore commend the Bill to the House.

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