14:30 Terry Jermy (Labour)

Thetford power station, in my constituency of South West Norfolk, is Europe’s largest poultry litter-fuelled power station and has successfully generated green energy for over 20 years. Being a proud Thetfordian, I remember the power station being built, back in 1999. Local people were concerned about the possible noise, about the smell—of course—and about traffic. Those concerns are long gone: the site is now a proud feature on the landscape and is important to our local economy. It produces home-grown electricity, contributing to our energy security, and it is crucial to the farming community across East Anglia.

There are 54 biomass sites in the UK. Were ROCs to expire with no replacement, around 50 of those sites would be forced to close. Critically, the sites at risk of closure are those that provide additional benefits beyond power generation, namely the safe and efficient disposal of waste wood and—as in our case—agricultural residues, preventing waste from being spread on the land or sent to landfill sites. Our power station also has an important role in supporting the environment and efforts to achieve net zero. The station’s output reduces CO 2 emissions by 85,000 tonnes each year by displacing the equivalent amount of generation from gas-fired plants. That is equivalent to taking 33,000 cars off the road.

It is worth mentioning that biomass sites aid disease prevention by incinerating poultry litter, which is one of the primary vectors for transmission of avian flu. Norfolk is the county with the second greatest number of chickens in the country and we are No. 1 for turkeys. Bird flu is obviously a main concern, as we have seen over the past few months and years, so any methods to reduce transmission are to be warmly welcomed. The Government’s clean power 2030 action plan understands that sustainable biomass plants such as Thetford are key to helping to deliver those environmental goals and targets, decarbonising many sectors of the economy. I look forward to hearing from the Minister today about how sites such as Thetford fit into that plan.

Why are we here today? The previous Conservative Government ran a consultation in July 2023 on ROCs, yet they did not publish an outcome or response, as confirmed by the House of Commons Library. That is a real shame, because the clock is ticking, with so many certificates set to begin expiring from 2027, at a time when we need to use all levers to produce electricity and achieve both energy security and net zero.

We know that renewables offer us security that fossil fuels cannot. Under the Labour Government in 2002, the renewables obligation was introduced as a support scheme for renewable electricity projects. The renewables obligation legislation placed a requirement on UK suppliers of electricity to get an increasing proportion of their electricity from renewable sources. Bioenergy is now the second largest source of renewable energy in the UK, generating 12.9% of the total electricity supply in 2021. When combined with carbon capture and storage, bioenergy may deliver negative emissions, which could contribute to the UK’s legal commitment to reach net zero carbon emissions by 2050. There has never been a more pertinent time to ensure that renewables are at the heart of tackling systemic problems.

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14:37 Jim Shannon (DUP)

In the past, I have worked closely alongside colleagues on this issue and I hope to do so again in the future, particularly with the inspiration and help of the Minister, because it is important that Northern Ireland has the same opportunities as the rest of the United Kingdom in relation to renewable energy.

Renewable energy is a path that we must pursue, and there need to be targets for us to achieve—the hon. Member for South West Norfolk outlined that as well. Policy direction for Northern Ireland is important and there have been movements to ensure that companies there can benefit from renewable energy incentives. Agencies such as Invest Northern Ireland or the Department of Agriculture, Environment and Rural Affairs, and local councils, including my own, can apply for some smaller grants and loans. However, it is important to note that these grants and loans are not on the same scale as the renewables obligation certificates scheme. If we were part of that scheme, we would be in a much better position.

In 2023, the Department for the Economy consulted on a new energy strategy action plan, but nothing formal has come from that. I know that the Assembly has only just got up and running again—it is good that it is up and running again—but it is time to focus on the renewables obligation certificates scheme and on green energy, and on the potential benefits that we can achieve in the future.

Energy is devolved in Northern Ireland, unlike in Scotland. However, Northern Ireland is an integral part of the United Kingdom, so there must be greater discussion between Westminster and the Northern Ireland Assembly to ensure that we are able to contribute to the net zero 2050 goals. I am reminded by the hon. Gentleman’s intervention of the SeaGen project in my constituency about 20 or 25 years ago, which tried to harness the tidal flows of the narrows of Portaferry and Strangford. At that time, it was not sustainable because of the price of energy, but today it would be. There are many projects we could look towards when it comes to contracts for difference.

To conclude, I look forward to working with colleagues to find a way forward that can benefit us all. The world is progressing, and climate change is a huge issue of major importance to many. The hon. Member for South West Norfolk referred to a project that is critically important for his constituency and that could be replicated across this great United Kingdom. Ensuring that we have a replacement strategy that we can take advantage of would be a positive step forward in achieving our goals. I look forward to the Minister’s contribution and hearing about her commitment. Through further discussion and integration and by working better together, Northern Ireland will not be left behind. Thank you so much, Sir Andrew.

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14:47 Leigh Ingham (Labour)

This discussion goes far beyond economic concerns; it is about the future of our energy security, our workforce and our commitment to achieving net zero emissions. The UK has been a pioneer in renewable energy and must continue to lead by example. That means ensuring that the transition to net zero is not just a slogan but a reality backed by practical policies that sustain and expand our low-carbon energy infrastructure.

Stafford is a critical hub for the production of clean energy technologies, supporting local and overseas energy needs. I am proud to have GE Vernova’s largest site based in Stafford, providing more than 1,700 jobs—an incredible investment in my constituency. Last Friday, I met representatives of GE Vernova, whose skilled engineers and craftsmen are dedicated to building the infrastructure needed for a cleaner, more sustainable future. Their work directly supports our crucial transition to net zero, and the decisions we make determine whether companies such as that continue to thrive.

As my hon. Friend mentioned, the previous Government never published the outcome of their call for evidence on the end of the renewables obligation contracts, leaving the industry high and dry. I urge this Government to provide certainty for the sector, to ensure that those facilities can continue to operate and contribute to our net zero ambitions. If we fail to support this transition effectively, we risk losing a secure energy source and thousands of jobs that depend on it. I look forward to the Minister’s response on how we can secure a stable and sustainable future for our energy industry.

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14:49 Jenny Riddell-Carpenter (Labour)

Biomass operations rely on the ROC scheme, which starts expiring in 2027. It is critical that we support the continuation of biomass energy production to ensure that we not only deliver on our net zero ambitions, but continue to support water quality improvement in our rivers in Suffolk by tackling nitrate run-off.

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14:51 Tim Farron (Liberal Democrat)

I want to say a few words about how ROCs fit in with the nation’s energy security and about the extent to which they sometimes have perverse incentives. Drax power station in Yorkshire enjoyed just over 9 million renewables obligation certificates last year, at a value of £548 million. The material burned at that site includes biomass that has been imported into the UK, which is often wood pellets, mostly from America and Canada. Drax has previously admitted that some of the wood is from primary or old-growth forests—ancient forests of incalculable value in terms of biodiversity and beauty that would be vital in the fight against climate change if they were not felled. The new contract, I am pleased to say, states that 100% of those pellets must be sustainably sourced, which is something. But it is not organic waste, and there is still something not very sustainable about wood imported from across the oceans and then burned. We want to ensure that we invest in renewable power, so that 90% of the UK’s electricity is generated from renewables by the end of this decade. To do that, we will need to call in all our available resources; we do not want a situation where we are meeting our targets by having renewables in name only.

Members have talked about energy security and the importance of getting to net zero, which is vital. In the last few days—hopefully it is longer than that—we have been waking up to our need to protect our national security on a military footing. Yesterday, in Treasury questions, I raised the issue of our failure to step up to the mark when it comes to food security. Only 55% of Britain’s food is produced in Britain; that is a deep threat to the United Kingdom’s food security, and we need to take action quickly to tackle that by undoing the basic payments cut and scrapping the family farm tax.

We also need to look at energy security. It troubles me that some of those who claim to be very patriotic seem to pour cold water on and be sceptical about the environmental imperative. Even if I cannot convince people of the reality of climate change, and of the need to produce renewable energy for that reason, if we care about our energy security, we should surely care about net zero, which is a way of achieving it. To put it bluntly, Vladimir Putin cannot turn off the wind, the waves or the sunshine in this country.

Does my hon. Friend recognise the fact that we have major issues with environmental tariffs being placed on renewable energy but not on the carbon fuel of mains gas? That is really hitting the renewable energy industry and the cost for consumers.

I completely agree. We are talking about incentives that we give to renewable energy generators and providers, but we have an energy market that essentially advantages not just fossil fuels but ones that, to some degree, are in the hands of potentially hostile powers. That is ludicrous for both the environment and our security.

I was pleased to hear Members on all sides of the debate talk about the importance of farmers and farming to the battle against climate change and to clean energy generation. We would love to see a recognition that farmers are primarily food producers but that diversification of businesses and cross-subsidy within them is a good thing. It is right that farmers should be incentivised and encouraged to use their land—for example, by putting solar panels on buildings and land that is not good for food production—so long as that is not displacing good-quality agricultural land.

I also want to say a word about grid capacity. A huge barrier to progress with this scheme and those that follow is the fact that 75% of energy sector insiders find timely grid connections to be the biggest single obstacle to growing renewable energy in the UK. To give a sense of the size of the queue, there are £200 billion-worth of projects waiting to be connected to the national grid, and that delays all the benefit that would come with that. We would seek to expand the grid network and unlock those billions of pounds of renewable energy projects through a land and sea use framework that has statutory weight in the planning and infrastructure Bill. That would help us to balance the many competing demands on our land, and the competing priorities of security and self-sufficiency that I mentioned earlier.

Those priorities also include local communities’ experiences, which are important to understand when we are trying to tackle the climate imperative. It is no good building huge energy infrastructure near communities if there is no clear, tangible benefit to them. For example, customers in communities local to such projects should receive energy at a discounted rate. If we build renewable energy schemes on the River Kent or the River Crake, the people of Kendal, Staveley, Windermere and Coniston should benefit from them, at least to a degree. We also want to empower local authorities to develop local renewable electricity generation and storage strategies, because they are best placed to understand where the most and least appropriate sites to place them are.

I return to the issues raised by the hon. Member for South West Norfolk. It is important that ROCs have played a significant part in the transition from fossil fuels to new and renewable forms of energy. I recognise that they have had a big impact on his constituency by creating jobs and ensuring that farmers have additional sources of income. They are part of a range of actions—our arsenal—for tackling water pollution. We must not throw out the good things that ROCs have achieved when we move on to new schemes, which hopefully will make even more progress in our move towards a society run entirely on renewable energy.

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15:02 Nick Timothy (Conservative)

The phasing out of the renewables obligation and feed-in tariffs is being used by the Government in their efforts to hoodwink the public on the true costs of their net zero policies. The National Energy System Operator’s 2030 report made several highly questionable assumptions about how the Government’s goal of decarbonising the grid will cut energy bills. One of the points made by NESO was that energy bills would fall due to the expiration of the renewables obligation and feed-in tariff contracts, but those contracts will expire regardless of the speed of decarbonisation, so it is misleading to include that as a benefit of the Government’s deeply flawed clean energy plan. We will see costs increase significantly elsewhere, thanks to Government policies.

It is absolutely our position that the Energy Secretary is trying to move too quickly. The plan to decarbonise the grid by 2030 is deemed by many experts to be unrealistic. It is predicated on a report produced by NESO, which itself says that the plan will lead to higher bills, and on calculations based on the carbon price increasing to £147 per tonne. It would be interesting to hear from the Minister whether the Government’s policy is to ensure that Britain’s carbon price should remain lower than the European carbon price for the duration of this Parliament, because the Secretary of State has so far refused to say that.

As long as policy races ahead of technology, costs will inevitably increase for taxpayers and consumers, and that is before we even consider the consequences of the Climate Change Committee’s seventh carbon budget. The committee has recommended a limit on the UK’s greenhouse gas emissions of 535 million tonnes of carbon dioxide, which represents an 87% reduction by 2040 compared with 1990 levels. That is an ambitious goal, but it is one that the committee’s own data shows will come at a net cost of £319 billion over the next 15 years. If we are to debate this, the Government should be honest and open about that fact.

No Government have ever rejected a carbon budget, and the Energy Secretary has so far refused to come to the House to make a statement on the publication of that budget, so perhaps the Minister can tell us whether the Government intend to accept the carbon budget in full. The Climate Change Committee believes that we will need a sixfold increase in offshore wind power, a doubling of onshore wind power and a fivefold increase in solar panels by 2040. To accelerate the growth of renewables at such a pace would require a huge increase in public subsidy.

There are so many questions left unanswered, and so far only silence from the Energy Secretary. That is not because the Government do not understand the scale of the challenge they have set themselves. The Energy Secretary understands it all too well, but he will not admit publicly what his ideological attachment to net zero and his net zero policies mean for us all: nothing less than a revolution in how we live our lives, and the massive expansion of public spending for a system of energy that is less reliable and more expensive in generating power. We need complete clarity, so that the mistakes of the renewables obligation are not repeated. Failure to do so will leave us poorer and exposed to risk and instability in the world.

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15:14 Kerry McCarthy (Labour)

I can give the hon. Member for Strangford, who has raised the question of the CfD regime before, the assurance that the Lords Minister from the Department for Energy Security and Net Zero met his Northern Ireland counterpart before Christmas to discuss it; I am told that that dialogue continues. The hon. Gentleman will also, I am sure, be pleased to know that the Minister for Energy will be in Belfast tomorrow—we have an inter-ministerial group from the devolved Administrations that moves around. I discussed the agenda with the Minister for Energy last week and the Department of Agriculture, Environment and Rural Affairs will be very much involved in those discussions. I can assure the hon. Gentleman that we are not ignoring Northern Ireland; it is very much on our radar.

On grid capacity, we know that grid capacity is a real issue, in terms of both our ambition for clean power by 2030 and our wider industrial decarbonisation. The Secretary of State likes to talk about the “four horsemen” standing in the way of us getting there, and grid is very much one of those. We have brought in Chris Stark, the former chief executive of the Climate Change Committee, to head up mission control on that issue, and he is working daily on how we can unblock and accelerate projects within the grid.

Turning to the actual debate, the experience of recent years has reinforced what we already knew: we cannot rely on fossil fuels. We need clean power to reduce vulnerability to volatile global fossil fuel markets, to give us energy security and reduce the cost of energy, and to tackle the climate crisis. That is why one of the Prime Minister’s five missions is to make Britain a clean energy superpower by delivering clean power by 2030 and accelerating to net zero. Electricity generated by renewables and nuclear power will be the backbone of a clean electricity system by 2030.

I have told the hon. Member for West Suffolk (Nick Timothy) how disappointed I am with the Opposition’s U-turn on this issue. I understand the position they are coming from and that there has been a change from the stance that they adopted in Government, but I have not heard from him what the answer is for our future energy security. What is the answer to dealing with the global fossil fuel markets? What is the answer to tackling the climate crisis? What is the answer to bringing down bills in the long term?

My hon. Friend makes a valid point. I wonder whether the Opposition spokesperson has spoken to businesses on this matter because, in all my conversations with businesses, both in opposition and now in government, it is clear that they want certainty. They need a stable investment environment if they are to make long-term decisions. They cannot invest in renewable energy, in industrial decarbonisation or in the economic growth this country needs without certainty. We know that one reason why we are in the economic situation we are is the lack of stability and the economic chaos at times under the previous Administration, particularly under the predecessor of my hon. Friend the Member for South West Norfolk. Therefore, certainty is what we need to have. Business is crying out for that.

The scheme played a fundamental role, as already noted, in getting the UK to where we are now on renewable energy generation. Combined, the UK-wide RO schemes support nearly 32% of the UK’s electricity supply, providing millions of UK households and businesses with a secure supply of clean energy. The scheme is now closed to new capacity, for reasons I will come on to.

Thetford power station, in the constituency of my hon. Friend the Member for South West Norfolk, has been accredited since the first day of the RO, back in April 2002, so it has so far received Government support for nearly 23 years. Over that time, it has generated more than 5.8 TWh of low-carbon baseload generation. That has been a valuable contribution to our transition to net zero. It has also increased our security of supply by generating home-grown energy. As he said, the station has provided 100 jobs in his constituency and co-benefits in handling poultry litter.

The station has another two years of support before its time under the RO ends, in March 2027. We are aware of the concerns about the future of the station once that support ends and my hon. Friend has done an excellent job in outlining those concerns today. My officials have repeatedly engaged both with the owners of the Thetford plant, Melton Renewable Energy, and with DEFRA officials to discuss those concerns.

To explain the overall context, as I have said, the RO has done sterling service in bringing forward the successful large-scale renewable energy sector that we see in the UK today. That has paved the way, as my hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn) said, for the cost reductions that we have seen over the last few years under the contracts for difference scheme, but its time has passed. The energy landscape has evolved since the scheme was launched in 2002 and it no longer provides the market incentives or the value for money that the transition to clean power requires.

The RO was designed to support renewable energy-generating stations during the early stages of development and generation, and to allow the recovery of high capital costs. For that reason, RO support is often significantly higher than that provided under successor policies such as contracts for difference. We must always bear in mind that consumers pay for the scheme through their electricity bills, and delivering value for money for them is essential. For that reason, we do not plan to extend RO support.

I appreciate that Melton Renewable Energy and my hon. Friend the Member for South West Norfolk are looking for early answers, but I must stress that no decisions have yet been made and we are happy to continue the conversation with him.

To conclude, renewable energy is critical to our mission to make the UK a clean energy superpower. We understand the concerns of some generators coming to the end of support under the RO and we are looking at ways to maximise the output and potential of those RO sites, while also considering the impact on consumer bills.

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