Graham Stuart
MP for Beverley and Holderness · Conservative · United Kingdom
“I hope and expect that we can move forward in the right way and get the balance right between being overly prescriptive to the banking industry and setting a clear sense of direction to make sure that no one is left behind, as so many Members have set out.”
“It is a pleasure to serve under your chairmanship, Mr Wishart. I congratulate the hon. Member for South Devon (Caroline Voaden) on securing this debate.”
“Is my hon. Friend as astonished as I am that the Minister—I know she is new to her post—has come here to propose a six-month extension of the movement of costs from bills to the Exchequer and cannot tell the Committee how much money that will cost?”
“The Minister is being most generous again. I did not ask her about protecting consumers from energy price shocks; I asked about a clear, unequivocal manifesto pledge to reduce household energy bills by £300. She, like her predecessors, refuses to address it directly. It was a clear promise.”
“Banking hubs themselves came out of an industry response from the NatWest executive. Does the Minister agree that we must present the information from the Lloyd review to the banking groups, be clear about what we want, and give them the opportunity to respond and provide a solution, as they did with banking hubs, so that we can perhaps a…”
“I am pleased to say that Lloyds listened and, as of this morning, people can deposit cheques at those places. These issues being raised by Members across the House today are important. I trust that given the timing of the Richard Lloyd report, the Minister in her seat will make sure that they are be resolved to everyone’s satisfaction.”
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“I want to see similar investments in Scotland. That is why we continue to work with industry as it develops a long-term industrial growth plan for the sector, following the publication of Tim Pick’s recommendations. Government backing attracts the private investment needed to deliver net zero. That includes research and development, where we are supporting innovation in floating wind technology through the floating offshore wind demonstration programme. That uses £31 million of Government funding, alongside £30 million from industry, to keep the UK at the cutting edge of offshore wind innovation. We are not stopping there.”
“I will in a moment, if time allows. To achieve our deployment ambitions and secure high-quality local jobs, we must continue to build a robust and competitive UK offshore wind supply chain. We are focused on maximising the economic opportunity arising from our transition to clean energy. Our significant strengths, including in wind energy and innovation, mean we have an essential role in building those supply chains, as demonstrated by this Government’s investment to date. Through the offshore wind manufacturing investment scheme, the UK Government have made available funding to support investment in major port and manufacturing infrastructure. We have seen more than £500 million invested by SeAH Wind and JDR Cable Systems in manufacturing facilities, which will create or safeguard up to 1,200 jobs.”
“The opportunities for Scotland, Wales, Northern Ireland and England are immense, and we should work collectively to ensure that we attract investment and create as many jobs as possible in this country supporting the transformation of our energy system and our spearheading of the global move to net zero, which is so important to us and future generations. Question put and agreed to .”
“This Government have made real progress in delivering the ambitions set out in the British energy security strategy and our “Powering up Britain” plan. We are committed to achieving our ambition of 50 GW of offshore wind by 2030. It has a vital role to play in delivering a decarbonised power system by 2035, subject to security of supply, and achieving our legally binding 2050 net zero commitments. We need to celebrate what we have done to date and recognise that most of the growth is not in the past, but in the future.”
“That is how it works: we get data by trying to understand supply chain costs and commissioning research, but the most valuable data of all is actual behaviour in real auctions. That information will come into adjustments for AR6 to ensure that our evidence base reflects the true market environment. At the same time, value for money for the consumer through a competitive process remains an important feature of the CfD scheme, and I make no apology for always prioritising protecting the consumer. With annual auctions now in place, the allocation round is due to open in about six months, meaning that there is an opportunity to gain a contract with minimal delay to deployment for projects that were not successful this time.”
“I am delighted that it delivered a total of 3.7 GW of renewable electricity. Contracts have gone to geothermal projects for the first time. There are record numbers of tidal stream projects, in which Scotland is a major player; I was delighted to visit the European Marine Energy Centre in Orkney and see so much of the significant work going on there. We also saw a doubling of onshore wind from last year’s record auction, and new solar. We hoped that offshore wind would be successful in this round, but we recognise that the challenging macroeconomic pressures felt by the industry around the world impacted its ability to come through the round successfully. We are reflecting carefully on the results of allocation round 5 so that we make appropriate adjustments for AR6.”
“We also want communities and individual families that are not involved directly in the industry to see benefits. That is why we have recently consulted on proposals for community benefits for transmission network infrastructure, including in Scotland, because we are essentially rewiring the whole UK economy as we make this transition. We must do it at speed, but in a way that has community support and in which we recognise the impact on host communities. Developing transmission infrastructure, particularly between Scotland and England, will be key for unlocking the full potential of renewable energy, and offshore wind in particular. It will mean that we can get electricity from where it is generated to where it is needed. Hon. Members will have seen that the first annual contracts for difference auction completed last week.”
“Denmark’s situation, size and industrial history are very different from the UK’s. What I am saying is that the UK is a European and, indeed, a world leader. We have decarbonised more than any other major economy on earth, and we believe that it is making us the best possible investment environment. We do not see the advantages of taking the state stakes that the hon. Gentleman suggests. It remains essential that communities most affected by offshore wind and its associated infrastructure can benefit from its deployment. We recognise, for example, that regional distribution charges particularly impact the north of Scotland. That is why our cross-subsidy scheme provides more than £100 million annually to protect electricity consumers in the far north. It is worth £60 a year to every household in the north of Scotland.”
“The outcome for one technology in one auction does not prevent us from reaching those goals.”
“The Government remain committed to offshore and floating offshore wind projects, and this round provides valuable learning for subsequent auctions. Work has already started on allocation round 6, incorporating the results of the recent round, and we look forward to a strong pipeline of technologies being able to participate. The move to annual auctions means that allocation round 6 will open in just six months’ time, in March 2024, which means that there could be minimal or indeed no delay in the deployment of new capacity through that round. The Government also remain committed to our target of decarbonising the power system by 2035 and our ambitions for 50 GW of offshore wind, including up to 5 GW of floating offshore wind. Our trajectory for meeting these aims, as well as our legally binding carbon budget 6 targets, is not linear.”
“The first annual contracts for difference auction—the first that we have ever done—was completed last week and delivered a total of 3.7 GW of renewable electricity, with contracts going to a record number of projects. The auction delivered significant quantities of new solar and onshore wind generation, as well as supporting 11 new tidal stream projects and, for the first time, geothermal projects. It was a competitive auction, set against a backdrop of highly challenging macroeconomic conditions that have impacted the sector globally. Given that this was our first annual round, it was to be expected that it would have a lower capacity than the previous biennial rounds, and, because last year’s round was the first for three years, a higher annual element than that record round.”
“We will continue to build our reputation as the country that has cut emissions more than any other major economy and that has transformed our electricity generation. He mentioned insulation—how he has the gall, I do not know. We have moved from 14% of homes being properly insulated when he left power to over 50% by the end of this year.”
“Gentleman understandably, given the weakness of his arguments, wants to heckle at all times, knowing how easy it is to dismantle them. He asks me where that capacity is, and I can tell him that 7.5 GW is currently under construction. As ever, the right hon. Gentleman fails to be on the side of consumers. We moved to an annualised auction precisely to ensure that we could learn the lessons from each round, add them to our industry insight and ensure that we could move forward. The projects take multiple years to be developed, and none of them has disappeared. I predict that, moving on from the triumph of 3.7 GW of renewables, which came through successfully on Friday, allocation round 6 will be more successful still.”
“I was pleased to see the other day that the rumours of the right hon. Gentleman no longer being in his position were not true. It is perhaps understandable in that context that he is so passionate about this highly successful round that has seen 3.7 GW on an annualised basis. I think that is a record round. He was a member of the previous Labour Government who left this country with 6.7% of its electricity coming from renewables. In the first quarter of this year, 48% of our electricity was from renewables. It was this Government, with our contracts for difference system, who transformed the economics of offshore wind. We have 77 GW of offshore wind in the pipeline—more than enough. We have 7.5— [ Interruption. ] The right hon.”
“I thank my hon. Friend, who is an absolute champion of floating wind and the economic opportunities it offers for her area and the rest of the UK. I was delighted to speak to her last week and meet her yesterday, and I pay tribute to her efforts. We have the largest floating wind pipeline in the world, based on confirmed seabed exclusivity arrangements. We have around 25 GW already identified, including through the ScotWind leasing round and innovation and targeted oil and gas—INTOG—processes. As she, as a great champion, knows, the Crown Estate is moving forward with its leasing round 5 for up to 4 GW of capacity in the Celtic sea this year. We have been the world leader on floating energy and we are going to stay the world leader. Thanks to the efforts of my hon. Friend, I know that we will have support across the House.”
“The hon. Gentleman and his party never fail to trash this country— [ Interruption. ] He can heckle all he wishes. I will be meeting industry representatives this afternoon and, as I have said, we will be announcing in two months’ time the price ceiling for the next round— [ Interruption. ] I am getting heckling, not least from His Majesty’s Opposition, who left us in that parlous situation. We are the world leader in so many of these technologies and we are going to continue to be. If the hon. Member for Angus (Dave Doogan) were to recognise the need to attract investment to this country and not talk it down, he might find that Scottish jobs would be even stronger in the pipeline than they are already.”
“Until wind capacity is constructed, it is not normally connected to the grid. That which has not been connected to the grid will need to be connected to the grid.”
“We typically set out the key auction parameters in November, and those include the ceiling of what we will pay for particular technologies. We do that based on our analysis of supply chain costs, and we also commission external analysis. The most important data of all comes from individual auction rounds, and it is on that basis that we set the price parameters. The industry warned us, as it does every year, that it wants us to pay more. We always have to make a judgment call between making sure that we minimise— [ Interruption. ] It would be so much easier to give my answer, Mr Speaker, if the right hon. Member for Doncaster North (Edward Miliband) would stop—”
“We set the prices, and we immediately learn from each auction. One of the reasons for having an annual auction is that we can quickly adjust and, as I said, projects can then come into the next round with minimal delay.”
“I thank the hon. Gentleman for revealing the true face of where the Labour party is going. We can go back to the days when we had hardly any renewables, and we can allow Great British Energy, or whatever Labour is going to call its creature, to squeeze out private investment and destroy the most successful renewables market in Europe, and to destroy this Government’s progress on tackling the parlous position left behind by the right hon. Member for Doncaster North and his friends. We will continue to be the world leader in cutting emissions, but not if we move to the state-run, left-wing obsessions of colleagues like the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle).”
“I thank my hon. Friend, who has been such a consistent champion not only for the power of renewables to meet our environmental challenges but for the economic benefits that come from them. He is absolutely right that the nature of the CfD system is that it learns from the previous auction round, which is the most real data of all, and uses that learning to inform the next round. That is why I am confident that, just as we had a success with 3.7 GW on Friday, AR6 promises to be more successful still.”
“We are in position and on track to meet our ambitions, which lead Europe—not that we would know that to listen to the hon. Lady.”
“We have to set the parameters based on the best information we have. As I say, one reason for moving to an annual round is to allow us quickly to learn the lessons of each round. We did not get the wind on this occasion, which I regret, and we will put the real-world prices and learnings from that into the next round. That is the system we have, because we are always trying to make sure that we get the parameters right so that we balance the need to generate additional green energy with the cost to the taxpayer. Understandably, given their carelessness with the public finances and with consumers, the Opposition do not seem to care about that. My job is to balance it, ensuring that we get the generation, and we have 77 GW in the pipeline.”
“As ever, my hon. Friend is well-informed. We are working on all those fronts. FLOWMIS applications closed just two weeks ago, and we are working flat out to analyse them. I hope that by the end of the year we will have shortlisted to the primary list and those schemes will move forward to due diligence, as we take forward not only our floating wind deployment, but the supply chain in the south-west, Wales, Scotland and around the rest of the UK. We are working on all those fronts and are determined to do that. As she rightly highlights, seeing our first geothermal projects come through the CfD is fantastic, as are the 11 tidal projects. I pay tribute to all colleagues who have worked so hard to promote tidal energy and make sure that we continue to be a world leader in that as well.”
“If the Labour party is not nationalising or creating some state-owned behemoth, it wants just to hurl money in the direction of business. Our judgment is to balance those things and I am pleased to say that we have been successful; we have the largest offshore wind sector in Europe. This country and this Government, through the CfDs, transformed the economics from the situation we inherited after the right hon. Member for Doncaster North and his colleagues had been in power.”
“My right hon. Friend is also someone who, through thick and thin, promotes that industry and sees the opportunity it offers Wales. He makes a special bid for the Welsh ports, as I would expect him to do, but he will understand that I can make no comment on that. I entirely agree with him on the importance of the Crown Estate round. Suffice it to say that across Government we have been working flat out, with his and other colleagues’ support, to support the Crown Estate to ensure that we maximise the opportunity in the Celtic sea.”
“The hon. Lady is completely mistaken. We are working flat out both to reduce demand for fossil fuels in this country and to build up our renewables. I would hope she would celebrate the fact that we have the largest offshore wind sector in Europe.”
“The CfD scheme is among the most successful, if not the most successful, of its sort in the world. We always look at ways in which we can improve it. We are looking at bringing in non-price factors as we finesse it, but the Opposition party’s idea of some state-run enterprise, squeezing out private investment, would destroy the opportunities going forward. We need at least another £100 billion to be invested by 2030 and if the Labour party ever did threaten to come into power, it would put all that at risk.”
“We are getting that balance right and we will continue to do so. Making sure that we look after the consumer is always my guiding light, and we balance that with getting the generation we need. We have seen companies such as SeAH investing in Teesside and Sumitomo looking at investing in Scotland—”
“As the hon. Gentleman decries this and talks both the area and the nation down, he then tells me that investors are getting nervous. If he were to champion all the successes we have had instead of decrying them, he might find that he would give investors even more confidence still.”
“The right hon. Gentleman and I do not see eye to eye on net zero or on the economic benefits of the wind industry. It does offer cost-effectiveness. It has been amazing to see how as it is scaled, it has been able to bring the price down. It was not obvious when we went out into the North sea that we would be able to bring the price crashing down, yet this country led the world in doing that. If he looks at the numbers, I hope he will find that the whole of this House can agree on one thing: offshore wind is an economic way of producing energy, and one that all of us should support.”
“I thank the hon. Lady for pulling back the veil on Labour’s real policy, which is that it hates private capital, it hates private investment and it would destroy the phenomenal success of this country in generating that. [Interruption.] The Front Benchers can heckle all they like, but that is what their Back Benchers want. That is the policy that threatens the British people and threatens our path to net zero. We must make sure that people such as the hon. Lady never have power in this country.”
“I thank the hon. and learned Lady for her question. Industry always asks to be paid more money. Our job is to make the right judgment call on getting the balance right.”
“I thank the hon. Gentleman, not least for his attempt at a gag. I can tell him that what he says is the whole basis of the system—that it learns from each round. The most real economic data that we get is from an auction round. Moving to annual rounds, there will be ebb and flow as the right balance is sought between getting the generation that we require, set against our extremely ambitious deadlines, and not paying too much. That is the balance that we strike. We have 3.7 GW and I imagine that we will do even better next time.”
“May I pay tribute to the right hon. Gentleman? I met him in his constituency when I visited the European Marine Energy Centre and saw for myself some of the projects in the water. I am personally determined to ensure that tidal stream continues to grow. We maintain our global leadership, with a very high percentage UK supply chain as a further positive to it. He tempts me to get ahead of myself on policy, but I cannot do that. However, what we are doing and what our dedicated pot this year did is further strengthen that so that we can get in a position where that might be a realistic policy position to take.”
“I thank the hon. Lady for her question, which is a good one. Obviously, we did look at whether intervention, given that prices continue to change after they are set, was the right thing to do. We think that the CfD mechanism—the way that it is operated—is sound and that the best thing to do is to allow that to pass for the year. One reason for having the annual auction was precisely to allow us quickly to adjust, and, as I say, as soon as November, we will be setting the parameters for the next year.”
“We are now running these auctions every year, and every year, we will be seeking to get the generation that we require at the lowest possible cost to the consumer. I make no apology for doing that. The fact that we have the most successful system, not only in Europe, but globally, is something that should be applauded and recognised.”
“I thank the hon. Gentleman for his constructive and effective question. He is absolutely right to highlight the challenges of making sure that we have the right transmission and connection infrastructure to facilitate offshore wind. We have to do that in a way that minimises negative impacts on communities, that rewards them for hosting it, and that looks at new technologies and innovations, just as we do in other areas, in order to facilitate that effective connection with minimal negative impact on communities that host.”
“I suggest that it is the hon. Gentleman and his colleagues who need to commit to facilitating that in Northern Ireland. Energy is devolved and it is up to them to get the devolved Assembly up and running. If they get devolved government going in Northern Ireland, they will unleash these opportunities. It is not for this Department, which is not responsible for energy in Northern Ireland.”
“What does the draft instrument do? To ensure that the capacity market continues to function effectively, we regularly make adjustments to the implementing legislation, based on our day-to-day experience of operating the scheme. In that context, the draft instrument makes changes to three electricity capacity regulations to deliver technical improvements that support the functioning of the capacity market.”
“I beg to move, That the Committee has considered the draft Electricity Capacity (Amendment) Regulations 2023. It is a great pleasure to serve under your chairmanship, Mr Robertson. The regulations were laid before the House on 12 June. The draft instrument seeks to make technical changes to the capacity market scheme, the Government’s main tool for ensuring security of supply in Great Britain. As set out in the “Powering Up Britain” paper, which was announced in the House on 30 March, we have bold new commitments to super-charge clean energy and accelerate renewable deployment. In the shorter term, while the future geopolitical context is still uncertain, we recognise that the world is likely to face continued challenges this winter around security of supply, considering Russia’s illegal invasion of Ukraine.”
“We have also been made aware that the existing transfer route that enables capacity agreements to be terminated in order to participate in the contracts for difference scheme cannot be used in practice, due to interactions between the definitions used in the regulations and the delivery timeframes. The draft instrument seeks to amend the definition of the contracts for difference transfer notice to enable the transfer route to be used. The draft instrument seeks to improve administrative arrangements by extending the timescales associated with the settlement body’s calculation of penalties and issuing of associated invoices for non-delivery.”
“I will make a little more progress first. The capacity market is now well established, with capacity auctions held every year since its inception in 2014. The draft instrument aims to reduce the administrative burden associated with the process, as we believe that it is more appropriate instead to notify the market when the intention is for an auction not to be held, rather than having to announce each year that it will be. The change will not impact the nature of participation in the scheme or announcements regarding the targets for the capacity auction. It simply seeks to change the way in which the announcement is made that confirms whether auctions will be held.”
“Through developments to the capacity market and the review of the electricity market arrangements programme, we are confident that the right market signals will be in place to ensure that we meet our 2035 decarbonisation target, subject to security of supply. As has been highlighted, we have also made a number of technical amendments to the capacity market rules, which were laid before the House on 12 July. Rule changes will be introduced to reduce administrative burdens for prospective capacity providers and clarify how auctions are operated for the benefit of participants. In conclusion, the draft instrument introduces a number of technical provisions necessary to enable the continued efficient operation of the capacity market, so that it can continue to deliver on its objectives. I commend the regulations to the Committee.”
“In the second phase, we intend to undertake further analysis and development before taking a final decision on implementation. The capacity market continues to support low-carbon technologies, with growing participation of demand-side response and storage technologies. In line with the broad support for greater alignment of the capacity market with net zero, the Government remain committed to introducing an emissions limit reduction for new build and refurbishing plants into the capacity market and exploring options to address barriers to low-carbon technologies to help drive the transition to a net zero power system by 2035, subject to security of supply. Further analysis is required to understand the impact that the proposals will have on energy security.”
“As happy as I would be to engage in a wider discussion about nuclear this morning, I think it might be best if I wrote to the hon. Gentleman to set out those specific concerns. Turning to the Government consultation, the changes in the draft instrument were consulted on at the start of the year and were broadly supported by respondents. We also consulted on a wider range of changes, including to the capacity market rules that set out the detailed provisions for the delivery of the scheme. As was signalled in the Government response to the consultation, we intend to follow a two-phased approach to reforms to the capacity market. First, we will proceed with technical changes to strengthen the security of supply and ensure better value for money.”
“If we want to have back-up and we cannot guarantee when we will call on it, we need to use that kind of transparent system, which increasingly encourages—as we are seeking to do by changing the system—green and flexible technologies, rather than diesel generators and so on, at the lowest possible cost. That is the aim of the amendments we are making, and I am glad to see agreement across the Committee today. Question put and agreed to.”
“I thank colleagues for their contributions. As has been said, these are technical and uncontroversial amendments. I will write to the hon. Member for Kilmarnock and Loudoun about his earlier questions. The capacity market is technology-neutral, and all capacity can bid to win agreements to make capacity available when needed. As I also set out, we are going through two phases of changes to improve the capacity market, exactly in line with what he described, in that we want to encourage demand-side response. To go back to what the hon. Member for Bristol East said about funding, the point of the auction system is to get the capacity we need to be there when we need it, at the lowest possible cost.”
“He is also correct that not only do the Government need to get the overall frameworks right, but we need to facilitate and support local authorities, communities and individuals to play their part. If we get this work right, we will not only deal with the environmental challenges, but reinforce our industrial strength, and grow and strengthen the prosperity of this country. That process can be led, to a great extent, from the east of England. Question put and agreed to.”
“If we can properly harness our unique renewable resources and do things correctly in a co-ordinated fashion, we will not only have low-cost electricity, but we will become a leader, certainly in the European context and perhaps globally, in the production of green hydrogen. Of course, we are also blessed—he did not mention this—with 78 gigatonnes of carbon storage; we have the vast share of Europe’s carbon storage potential, and we can host carbon storage for our neighbours, too. My hon. Friend is quite right to highlight all the opportunities in these sectors, and he is also right to congratulate people such as Stuart Rimmer at East Coast College and John Best for the internships he has supported.”