11:52 The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)

The economics of the energy market have changed significantly in recent years. The cost of renewable technologies such as offshore wind has fallen dramatically, to the point where they now require very little public subsidy and will soon require none. We have also seen a strengthening in the pipeline of projects coming forward, meaning that renewable energy may now be just as cheap, but also readily available.

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00:00 Dr Alan Whitehead (Southampton, Test) (Lab)

The long-term coherence of the UK capacity arrangements is now significantly disrupted. With the capacity market also falling foul of legal challenge, these elements add up to a strategic energy sector that is now being grossly mishandled by this Government. Now that their nuclear plan has gone up in smoke what plan can the Secretary of State spell out to us for finding new backers for these projects? Given the apparent capacity constraint, is he intending to uprate the coming contracts for difference auction, removing the caps on capacity and funding that he has imposed to provide further opportunity to build new renewable energy capacity to replace what has been lost?

For this plant at Wylfa alone, Hitachi had planned to invest £16 billion. Does the Secretary of State have contingency plans, rather than warm words, that he can announce today for the economies of Anglesey and north Wales, where Wylfa was projected to create up to 10,000 jobs at peak periods of construction and 850 permanent jobs? For that matter, what about Moorside and the plant it lost two months ago? Government dithering leading to the cancellation of that plant has seriously undermined the UK’s energy security, its decarbonisation goals and the economy of Cumbria. The people of Moorside expected the plant, and roads, infrastructure and even apartment blocks had been built in preparation, all of which will now go to waste.

Given that energy is one of the sectors that creates the most carbon, today’s news deepens our profound concern about the Government’s ability to meet their own climate targets. The Labour party is proud to have announced our goal of reaching net-zero greenhouse gas emissions before 2050 and we congratulate the Government on attempting to catch up with our green ambitions. But given that the clean growth plan was already falling short and the Government were already failing to meet those targets, can the Secretary of State give us some detail today on how he expects to meet UK carbon budgets in the light of today’s developments? Can he assure us he is not intending to replace the low-carbon power that has been lost with new fossil fuel plants?

Far from being at the expense of renewable energy, our energy policies have supported Scotland to become a world leader in securing energy from renewable sources. In fact, we heard earlier this month from WWF Scotland that wind output in Scotland has broken through the barrier of 100% of demand for the first time. That comes as a result of the policies that this Government have put in place to bring down the costs of wind, which is highly competitive. As a result, that is causing some competitive challenges for other technologies, including nuclear, but I would have thought that the hon. Gentleman would welcome the progress that has been made on renewables.

When it comes to investment in renewables, the hon. Gentleman will know that Wales is a substantial and proud leader in renewable energy. I think Gwynt y Môr is the second largest wind farm already deployed in Europe. I mentioned in my statement the rising availability of alternative technologies. To put this in context, in 2017 we procured more than 3 GW of offshore wind in a single contract for difference auction at £57.50 per MWh. That is more in a single auction than this plant was going to provide. As I have said, the challenge is the competition coming from other technologies, and Wales is a beneficiary of some aspects of that.

In his statement, my right hon. Friend said that the economics of the energy market had changed significantly in recent years, meaning that renewable energy could now be not only cheap but readily available. Does he share my concern that consumers will not see all the benefits of the reduced prices, given that we are bound into these exceedingly long-term and hugely expensive contracts? An example is Hinkley, whose strike price means that it will probably be the most expensive form of energy in the history of energy generation. Can he give me an assurance or commitment that nuclear power will not result in consumer bills skyrocketing in the years to come?

The Secretary of State rightly points to the fact that renewable energy is a Scottish success story, and such events vindicate the Scottish Government’s decision not to join the UK Government’s vision for the UK as a nuclear nation. Will he please outline the Government’s sunk costs in terms of civil service time and any other development costs incurred as a result of this project?

I do not agree with the hon. Gentleman, but I note his interest and his experience in this field. National Grid is undertaking a substantial programme of transformation to make the grid smarter and able to accommodate intermittent renewables. Again, progress has been made. The amount of renewable energy being deployed is vastly in excess of what the right hon. Member for Kingston and Surbiton (Sir Edward Davey) was advised was possible when he was in office. Great strides are being made. A smarter grid is a more effective and more resilient grid.

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