12:30 Selaine Saxby (North Devon) (Con)

The industry welcomed the administrative strike price for AR6, with the uplift of £60 from £116 per MWh to £176 per MWh, demonstrating that the Government have listened to the industry and signalled a policy change that acknowledges the changing economic landscape for developers. Following the Climate Change Committee’s recommendations, floating offshore wind, which I refer to as FLOW, is set to make up to 5 GW of our energy generation by 2030 and 50 GW by 2050. The UK is a leader in FLOW, having the largest pipeline of floating projects globally, with leases of 33 GW and two pioneer projects in Scotland—Kincardine and Hywind.

FLOW in the Celtic sea offers unique advantages, allowing us to harness energy regardless of wind direction. Despite its previous neglect due to seabed depths, FLOW can now be deployed in waters deeper than 60 metres, unlocking 80% of our offshore wind resource. That technology presents a significant opportunity for the region’s economic growth and net zero benefits. In 2024, the Crown Estate launched the leasing round for up to 4.5 GW in the Celtic sea, a crucial component in the battle to mitigate climate change and to make progress to net zero greenhouse gas emissions. I am pleased that the Crown Estate is taking what steps it can to drive onshore benefits through its leasing round, but a tender process is only one mechanism for realising the opportunities arising from such projects.

We also need dedicated Celtic sea FLOWMIS allocations, place-based investment, regional co-ordination of public funds and proper net zero plans for the region. The CfD budget plays a vital role in supporting the development of FLOW in both the North sea and the Celtic sea, but it must be substantial enough to ensure the progress of multiple FLOW projects each year, thereby preventing a monopoly in the North sea and ensuring a fair distribution of resources.

The port of Milford Haven stands ready to create a new green energy terminal in Pembroke Dock. As the closest port to the Celtic sea development sites, the port of Milford Haven’s development ambitions at Criterion quay for a 400 MW test and demonstration phase and a fit-for-purpose site for integration and operations and maintenance activities are crucial to support future commercial-scale phases of FLOW in the Celtic sea.

The barriers to delivering FLOW must be removed to ensure lasting benefits. Streamlining the planning and consenting process and increasing co-operation between Government Departments—from the Department for Energy Security and Net Zero and the Department for Environment, Food and Rural Affairs to the Department for Transport and others, taking a whole systems approach—could be transformational. For the Celtic sea, the APPG preference throughout has been that a single cable corridor to Devon and Cornwall and one to south Wales should be established to reduce sea floor damage and cabling onshore, as the bigger projects go out to sea. A strategic view taken on cable corridors might also reduce costs.

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12:47 Peter Grant (Glenrothes) (SNP)

It seems to me that the byword for a future energy security strategy has to be diversity, or variability. We should be looking at every opportunity out there for us to secure renewable energy; we should not be turning anything down just now. Offshore wind has been recognised for some time, and given that the technology now allows us to float wind turbines rather than trying to anchor them to the sea massively increases how much of our waters can potentially be tapped for wind. As the hon. Lady pointed out, having installations around different parts of the UK also increases the chances that the wind will be blowing in the right direction somewhere.

Energy UK has forecast that, based on the current budget, round 6 is likely to deliver between 3 GW and 5 GW of offshore wind capacity. That will leave us looking for 16 GW from round 7—an almost impossible task when we consider how little we have produced over the previous rounds. When the budget was set, it was set at a level that the industry is telling us was too low. Okay, businesses are there to make a profit and they are good at telling the Government they need more money when they do not, but they were not crying wolf last time. They were not crying wolf in round 5, and I do not think that they are crying wolf in round 6. The disaster and humiliation that was round 5 was completely preventable, and the current jeopardy facing round 6 is preventable as well. If the Government are really serious about supporting innovation and the development of new renewable energy technologies, such as floating offshore wind, they need to be prepared to invest in it. As has already been mentioned, other people are; they are going to take the lead from us.

We are—and certainly should be—a leader in this technology. Scotland is a world leader in a number of renewable energy technologies. Floating offshore wind, as has been mentioned, gives creative flexibility. About 80% of Europe’s offshore wind resource is estimated to be in waters that are more than 60 metres deep, which is too deep for a fixed wind turbine but is very exploitable for floating turbines. In Scotland, we know that we are an energy-rich country. We already produce significantly more energy than we need. We are a world leader in a lot of renewable energy technologies, including offshore wind and hydrogen, which is being developed—as Members will know—in my constituency, along the coast in Methil and Buckhaven. We have the capacity, the world-leading technology and the expertise, but what is holding us back is a lack of enthusiasm and a lack of visible commitment from a succession of Governments. We have a long history in Scotland of developing floating systems to use in the oil and gas sector. That technology is adaptable, and we have the people with the ability to adapt that expertise, in the same way as they adapted the previous expertise in fixed drilling installations for oil and gas. That was used in the design of the earlier generations of wind turbines.

It is maybe hard to believe now, but when the contracts for difference model was originally set up, it was hailed as the gold standard. It was one of the best ways of securing renewable energy investment that anyone had ever come up with, and it has achieved quite a lot. However, one of the lessons of the failure of allocation round 5 is that, while other countries and economies have continued to push forward at pace, the UK has started to fall back. In recent years, while successive allocation rounds in the UK have failed, we have seen the implementation of, for example, inflation reduction in the US and the green deal in the European Union. That means that, when green energy companies are looking for somewhere to invest—and a lot of those people will invest anywhere—they see tax credits in America and subsidies in the European Union, but all too often they see what looks to them like half-hearted commitment from the United Kingdom. If that continues, we will start to lose that investment.

The UK Government should be doing what they can to make sure that Scotland, and indeed the rest of the UK, retains its world-leading position at the front of the green energy transition revolution. We can do that by increasing funding to green energy programmes, including floating offshore wind and fixed onshore wind. It is estimated that between 8 GW and 12 GW of offshore wind projects around the UK already have planning consent—they are ready to go if somebody would just provide some of the investment they need. They are already there. If the contracts for difference had the capacity, they could all be brought on stream much more quickly. They are ready to start building to produce the clean, reliable and cheap energy we know we will need to meet our net zero climate change targets.

The SNP will continue to call on whoever is in government after the election to introduce a comprehensive industrial strategy that includes identification of where our longer-term energy needs will be met. They should be aiming to match the Scottish Government’s just transition fund, and invest at least £28 billion a year into green transition. The potential Government in waiting have ditched their promises; I hope they will reinstate them in their election manifesto.

The renewable energy industry is an essential component of Scotland’s long-term growth strategy. We can be world leaders—we are already world leaders. We want to maintain that position. We cannot allow a UK Government of any persuasion to hold Scotland back in the 2020s in the same way they did back in the 1970s and 1980s.

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13:09 The Minister for Energy Security and Net Zero (Justin Tomlinson)

I stress that there has to be a balance. The thrust of this debate has been about the need to be more generous to unlock more; I absolutely get that, because we have legally binding commitments and we need to expand our basket of renewable energy sources, but we also have to be held to account by the Public Accounts Committee. I served on the Committee for three years and I know that the current Chair, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), will not let taxpayers’ money be wasted unnecessarily, so there is always a balance. If we are overly successful, perhaps we have overpaid, so we have to strike that balance. There are few colleagues more interested in making sure that we do not forget the impact on consumers’ bills.

The Government are proud of our record on tackling climate change, but we will never lose sight of the need to do so in a pragmatic way and to ensure that ultimately we deliver a cleaner and, crucially, more efficient energy system that leads to cheaper consumer bills. If we lose sight of that, we lose public support and endanger all the good will that collectively we are seeking to unlock.

We are taking significant action to support supply chains through the green industries growth accelerator, a fund of nearly £1.1 billion to support investment in manufacturing capability for clean energy sectors. That will enable the UK to seize growth opportunities from the transition to net zero by unlocking private investment and creating new jobs, for which we are the envy of the world.

Britain’s geography makes it ideally suited to offshore wind, and floating offshore wind enables us to make the most of our natural resources by unlocking the potential out at sea. We are aware of the challenges involved and are taking actions to address them. We know that this technology is an enormous opportunity for our journey to net zero and for our economic growth. It is local communities such as those in the Celtic sea region that stand to gain the most from the economic growth and the highly skilled roles that will be created.

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