Michael Shanks
MP for Rutherglen · Labour · United Kingdom
“In the past two years, during which I have had the privilege of doing this job, my hon. Friend has frequently shared her experiences as an electrical engineer, and she is right. I, too, am in awe of the grid and of the work that its operators do day in, day out as part of the extremely complex job of balancing supply and demand 24/7.”
“First, on the point about this somehow being a Government project, it is absolutely not. That is why my answers to the right hon. Member for Tatton reflected the fact that, right now, private developers across the country in a whole range of sectors are developing private propositions for all sorts of things.”
“As I have said to the shadow Secretary of State before, though, she is conflating two things, I think wilfully. There are questions to be asked about things that have been raised with her by whistleblowers, which we will now investigate.”
“My hon. Friend is absolutely right, and that was the point I was going to come on to. Community engagement is absolutely critical. It is an absolutely firm expectation from Ministers that any of these large-scale infrastructure projects should have meaningful engagement with communities.”
“There was a lot there, but I am sorry that the hon. Gentleman is not happy to see me at the Dispatch Box. I am very happy to see him in his place, and to be here to answer this important urgent question. On security of supply, let me say that, yes, renewables are not going to be the entirety of our mix at all times.”
“I am aware of that. Councils can take a view on a whole range of things; I do not think there is anything controversial about a council making its views known on a particular project. It is very welcome to do that, and that is why we have democratically elected councillors in this country. On a final point by the right hon.”
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“It is a pleasure to serve under your chairship, Sir Roger, although the debate has probably not been conducted in the best way to discuss this topic. I draw the attention of the right hon. Member for Tatton (Esther McVey) to the recent Adjournment debate secured by her colleague the hon. Member for Chester South and Eddisbury (Aphra Brandreth), which I think she was unable to attend.”
“That is not what I said at all, Sir Roger. The debate has been perfectly in order, but I do not think the public watching will have got much from it. That is my assessment and, I am sure, the assessment of many others watching. As I was saying, I encourage the right hon. Lady, if she did not see the recent debate on this topic, to look at the remarks by her hon. Friend the Member for Chester South and Eddisbury, who rightly raised concerns about local communities, but in a way that was, I think, based slightly more in fact than in rhetoric. I will come to the right hon. Lady’s questions.”
“The NSIP regime exists—indeed, it existed under the previous Conservative Government—to recognise that there are some projects of such a scale that local councils cannot individually decide on them, so they should be decided on at a national level. That is a process that has been undertaken for many years. I want to be really clear, however, that that recognition does not suggest, in any way, that there will be a particular outcome from the process. Not only has there been no decision from Government on this project, but it has not even been submitted for a decision at this stage. It is a long way from that process.”
“It plays a strategically important part, along with our economic growth and industrial strategy, in how we will broadly deliver net zero. Before I address some of the right hon. Lady’s points on the Peak Cluster, I want to repeat a point I made in the Adjournment debate about the voice of local communities, which is one that she also rightly made. She made a point about the nationally significant infrastructure project regime, which I want to clarify. Perhaps I misunderstood, but I think she was trying to suggest that the Government have somehow contrived for the Secretary of State to make a decision on a particular project.”
“As I said in the Adjournment debate, other technologies for creating low-carbon cement exist, but they are not yet at a stage where they can be deployed at scale. Carbon capture is important, and there is no route to net zero that does not involve this technology. I want to remind the right hon. Member for Tatton why net zero is important, although I know that not everyone will agree. Given that we are living through climate change on such a scale, we as a country should be taking our responsibility seriously to do everything we can, and this is an important part of how we tackle it. This is also an economic opportunity that not only creates thousands of jobs in carbon capture but protects thousands of jobs in the heavy industry that we do not want to see leaving this country to go elsewhere.”
“Around 40% of UK cement and lime production takes place in Derbyshire and Staffordshire. Cement is one of the foundational heavy industries, and one of our most important substances, to underpin growth in our economy. As a result, the industry was recognised in the industrial strategy as a foundational input for growth. It is also an economically important sector, contributing around £350 million in gross value added and supporting thousands of jobs. The challenge we have is future-proofing the industry. A number of businesses now want to buy low-carbon cement to construct their projects, but low-carbon cement is produced elsewhere in the world, so it is important to find ways to be competitive in that market.”
“Lady served in various ministerial roles, drove forward investment in carbon capture, which we have continued. This is not something that just appeared in July last year; it is a technology that Governments have recognised will play an important part in decarbonising our energy system. This technology is also important for particular parts of our industry, which are now competing against imports from other parts of Europe that utilise carbon capture, usage and storage. Cement is one example that the Peak Cluster project is looking at, but we are taking forward other important clusters, such as the Viking and Acorn clusters, that the previous Conservative Government supported. Decarbonising cement might not seem like a particularly important topic to a lot of people, but it is actually critical.”
“Let me respond to the right hon. Lady’s points. She has now accused me twice in this House of being “elusive” and of “obfuscation”. I have answered every single one of her written parliamentary questions. I am not responsible for the fact that she may or may not like the answers I give, but I have answered every single one of her questions, and I responded to her point of order in the main Chamber. I resent the implication that I have not done that, because I take my responsibilities to Parliament very seriously. First, I will come back a little from the Peak Cluster itself to make some points about why carbon capture is important. I say that partly because carbon capture technology has been around a long time. The previous Government, in which the right hon.”
“I will give way in just a second. The right hon. Lady’s point about the NSIP regime was quite wrong. Decisions are made based on applications that are submitted, but no application has been submitted. They are based on all the facts, including the community engagement that takes place—I will come back to that after I have given way. Applications must demonstrate genuine community engagement and learning from the views of communities; it is not just a listening exercise but a shaping exercise, and that has not yet concluded.”
“It has operated under Governments of all political persuasions to make decisions about how we steward the North sea licensing regime not only for oil and gas but, increasingly, for carbon capture. It makes those decisions independently of Government; Ministers do not interfere in the decision making of the NSTA. Again, she seems to be drawing conclusions about an independent regulator that are neither fair on the regulator nor accurate in fact.”
“I think I just said that the nationally significant infrastructure project regime exists so that decisions can be made at a national level by different Secretaries of State. In this case, it is an energy project, so yes, the decision will be made by the Secretary of State for Energy. The right hon. Lady seems to be implying that there is somehow a predetermined outcome, but the application has not even been submitted for consideration, so I do not think that is a sensible position to take. The right hon. Lady also cast aspersions on the North Sea Transition Authority, which is an independent regulator. It was the Oil and Gas Authority for many years; it is now the North Sea Transition Authority.”
“However, that building should never be done without proper engagement with communities, which means communities feeling that they have had their say and that their say has been listened to. This project is one example of where much more consultation has to happen.”
“Criticisms have been levelled at the Peak Cluster project that its consultation with communities has not yet been good enough. I understand that it is planning to do more, but it is not for me to direct it to do that. It must engage meaningfully with communities because, once a proposal has been submitted, if community engagement has not been meaningful, that will count against the project. There is a wider argument here about principle. The Government have said from day one of coming into office that it is important that we build things as a country again and that we do not become a country that just spends decades talking about important infrastructure but never builds it.”
“My hon. Friend is absolutely right, and that was the point I was going to come on to. Community engagement is absolutely critical. It is an absolutely firm expectation from Ministers that any of these large-scale infrastructure projects should have meaningful engagement with communities. However, it is also absolutely critical for any project that wants to succeed in the NSIP process to demonstrate not only that it has carried out consultation but that that consultation has had a meaningful impact on the shaping of the project. That is one of the key factors in decision making in NSIP applications. I want to echo a point that was made in the Adjournment debate on this subject and that many Members have raised with me outside of debates in Parliament, which is about the need for extensive consultation on this particular project.”
“Safety will be at the forefront of any decision about how we take this project forward. It is absolutely critical but, as I have said, CCS is not some novel technology whose safety considerations we do not understand. It is managed, understood and regulated effectively at the moment.”
“Peak Cluster is also not one of the clusters that the Government have initially taken forward. We are taking forward two clusters initially to drive carbon capture and storage; the Peak Cluster is not one of them. I make that point again on the record. My hon. Friend the Member for Mid Cheshire (Andrew Cooper) made a second point about safety. It is really important to say that carbon capture and storage is not a new technology; it has been tried and tested, across industry and across power generation at scale, for a long time. Geological carbon dioxide storage has been in operation for decades. Norway has stored CO 2 since 1996—it has stored over 20 million tonnes of it so far—and a safe and robust regulatory regime exists precisely to ensure that safety standards are as high as they possibly can be.”
“First, on the point about this somehow being a Government project, it is absolutely not. That is why my answers to the right hon. Member for Tatton reflected the fact that, right now, private developers across the country in a whole range of sectors are developing private propositions for all sorts of things. Until those proposals come to Government, either with a request for funding or as part of the NSIP regime, the Government do not have a view on whether they are Government projects or not. They are not delivered by Government; they are private investments and therefore it is for those companies to put forward their proposition. The Government will then take a view on it, as we do with all nationally significant infrastructure projects. That is the first point about this being a Government project, which it is absolutely not.”
“I have not seen or signed off any funding applications for the Peak Cluster pipeline and nor have any Ministers. The NWF makes those decisions on its own framework, as set out by the Treasury and Parliament. It should not be taken as any indication of my Department’s support or otherwise for a particular project.”
“I am aware of that. Councils can take a view on a whole range of things; I do not think there is anything controversial about a council making its views known on a particular project. It is very welcome to do that, and that is why we have democratically elected councillors in this country. On a final point by the right hon. Lady and others about Government funding for this project, she draws a connection between the investment of the National Wealth Fund and the fact that it is wholly owned by the Government. I understand the connection, but equally, it is not correct to say that that represents financial support from my Department or the Government for a project. The National Wealth Fund was set up to provide investment for important infrastructure projects, and it makes its decisions independently from Government.”
“I can write to my hon. Friend with the specifics of the investment committee, but the National Wealth Fund is set up independently from Government to take stakes in projects on behalf of the British public, so that we would own a stake in some of these projects—instead of just handing out grants for things, we would actually own part of them. There is an investment committee that sets up these decisions, and the Treasury is the body responsible for the National Wealth Fund. I can write to her with specifics.”
“The Government will look at all of this in the round in terms of individual projects. I repeat the point that I made at the beginning: this is not a project that the Government are driving forward, and it is not a project that we are saying we do or do not support, because at this point in time no proposal has come before us to do that. In due course, we will do that. In the meantime, I encourage everyone in the local community, Members of Parliament, the Peak Cluster itself and others to engage with the process.”
“The exchange of views is important, and everyone, whether or not they are listening to this debate, should know that the Government take community engagement very seriously. We expect to see meaningful engagement with communities, but at the same time the Government have set out an ambitious plan to decarbonise our economy. That is important for a whole range of reasons, but it is also a hugely important economic opportunity for us as a country. Decarbonising hard-to-abate sectors such as cement and lime, which are critical to our economy, is difficult. CCUS is a route to doing that. It is essential not only for meeting our climate commitments, but for the economic opportunities that it offers. Future project proposals are subject to scrutiny, high standards and a tough regulatory regime.”
“The principle of the National Wealth Fund is that we can make financial investments in projects. In some of those cases, that means taking an equity stake. Sometimes it does not, but sometimes it does. The National Wealth Fund has been around for long enough now; I am sure Members are aware of it. I will close with something that, in part, reflects what Members said in the Adjournment debate secured by the hon. Member for Chester South and Eddisbury. Any large-scale infrastructure project comes with concerns from local communities, and it is right and proper that such communities voice those concerns in any way they can. That has to be a respectful exchange of views, which has not always been the case thus far, but I understand the strength of feeling on this—it is absolutely understandable.”
“I am just rounding up. In the end, I hope that we will come to a view where communities feel they have been heard and where projects can move forward on their individual merits. That will be part of the process when we come to it. Question put and agreed to .”
“Ofgem, as the independent regulator, is also working with NESO to initiate a formal review of events during the June heatwave. I welcome this important transparency, and look forward to working with NESO and Ofgem on taking forward the lessons learned.”
“Great Britain has one of the most resilient energy systems in the world, and the Government work closely with NESO and the wider sector to ensure that this resilience is constantly maintained. Market notices, such as those issued by NESO during the heatwaves, are standard operational tools that can be used to support energy security, and these were used successfully to maintain grid stability. However, it is important to acknowledge that extreme heat events, such as those experienced this summer, are likely to occur more frequently as our climate continues to change. My Department will continue to work with NESO and Ofgem to identify any lessons from these events, and to work to ensure that our electricity system remains resilient.”
“NESO has already responded publicly that all operational decisions are taken solely by authorised operational control room personnel, and that NESO does not instruct employees to avoid retaining records. We will work closely with Ofgem to monitor both the progress and the outcome of the investigation. However, it would be wrong to pre-empt that outcome, and the investigation must be allowed to run its course. I want to make it clear that during this period of unprecedented extreme heat, the Great British grid remains stable. No customers were impacted by tight electricity margins, and NESO had a number of tools available to ensure our energy security.”
“On 7 July, the shadow Secretary of State, the right hon. Member for East Surrey (Claire Coutinho), wrote to the Government alleging practices of poor information handling in NESO and interference in operational decision-making in the control room. The Government take this issue incredibly seriously. Since the allegations came to light, we have been engaging with NESO and Ofgem to establish the facts. Both my right hon. Friend the Secretary of State and I have spoken to the chief executive of NESO. NESO has now appointed an external legal firm to conduct a full investigation into the claims, and a report is to be delivered to the board’s head of risk and controls and to Ofgem in the coming weeks. The legal firm will interview members of the control room, without any other NESO employees present.”
“Lady genuinely believes in the long-term impact of what is happening, I hope she will change course herself and support the policies that would tackle it. In the meantime, we will take this issue seriously. We will investigate all allegations that come to us to ensure that there is confidence in the energy system, and that it is operating exactly as we would expect it to.”
“However, it is right and proper that, as I think everyone in the House would expect, we wait for the outcome of an inquiry that will take a matter of weeks to establish the full facts, so that we can use any additional learning from it, but also so that we can continue to ensure that the country is confident that our energy system is resilient. We met the electricity demand on every single one of the days in question, although I do not doubt for a second that it was difficult on some of those days, as it was throughout Europe. The solution to that is to invest further in the stability of the grid, and also to tackle the fundamental question of why our temperatures are rising year after year, the answer to which is climate change. If the right hon.”
“Ramping up the rhetoric does not get to the facts that we both share an interest in understanding. I make that point first. Secondly, can I just endorse the comments she made at the beginning about the critical role that operators in the NESO control room play every day? I was privileged to visit the control room in my role, and to see the job that they do. They have an enormous amount of responsibility on their shoulders; we should recognise how seriously they take their role. This investigation, which is independent from NESO, is so important for uncovering the facts. The terms of reference have been published, and are available on Ofgem’s website. They state clearly that power system managers and other control room personnel who worked on shift during the period in question will be interviewed.”
“As I have said to the shadow Secretary of State before, though, she is conflating two things, I think wilfully. There are questions to be asked about things that have been raised with her by whistleblowers, which we will now investigate. However, she suggests that the electricity grid was in a state in which blackouts were imminent, which is simply not the case. I gently say to her that it is irresponsible to suggest, in this place and on social media, that our energy system was at risk in recent periods. Electricity margin notices are a standard tool. I do not have time to read all the dates on which electricity margin notices were issued under the previous Government, but I can tell the House that they are a standard tool that has been deployed a number of times. We all have a duty to be careful about our words in this House.”
“First, I reiterate what I said at the beginning of the statement. The shadow Secretary of State raised these concerns about whistleblowers who had been in touch with her for the first time at Department for Energy Security and Net Zero oral questions. I said to her, in that session, that if she had details, she should share them with the Department. She did that, and subsequently we have taken this matter incredibly seriously. A process has been put in place; an independent review will be conducted, taking into account the information that she has shared. If she has more information from subsequent whistleblowers, I am sure that she will share that with us. We take this matter seriously. Nobody is washing their hands of this matter at all.”
“We have a responsibility in this House not to ratchet up the rhetoric simply to get some retweets on Twitter, but to take seriously the job of balancing our energy system, as we did every single day—and NESO has confirmed that.”
“I welcome my hon. Friend’s comments. Let me first reiterate that, as I said a moment ago, incredibly skilled staff work in the control room 24/7 to ensure that we are balancing our electricity demand and supply across the country, and have done so without any disruption to that supply; I pay tribute to the work that they do. What I said earlier in response to the shadow Secretary of State was not that the allegations that have emerged today were somehow scaremongering. If whistleblowers have raised concerns, it is right and proper that we investigate them fully, and we will absolutely do that. However, it is scaremongering to take to social media or come to the House and somehow imply that we were close to blackouts, which is simply not the case.”
“As I have said, however, although at times frequency moved outside the normal operating range, it never moved outside the statutory limits. We met demand for all customers, and there was no disruption for customers at all. That is an important fact that is borne out by all the data that has already been published, although it does not take away from the fact that if we have lessons to learn from those incidents, we will absolutely learn them.”
“Obviously the inquiry will get to the bottom of the operator’s views on that, but that is the point that it has made in recent days. As for the hon. Gentleman’s wider point, I agree with him. It is important for us to recognise that grid stability is foundational to everything in our energy system. That is why we are investing record amounts in upgrading the grid so that it is resilient for the future; it is also why we are looking at how we invest in, for instance, storage—which the hon. Gentleman rightly mentioned—so that we can store renewable energy that we are generating until when we absolutely need it, and have more tools at our disposal at moments of tight margins such as the one under discussion.”
“The hon. Gentleman has made a number of important points. The terms of reference are available on Ofgem’s website for the inquiry that NESO has commissioned an independent law firm to carry out. It will conduct interviews with staff who were in the control room on that day to get to the bottom of the allegations that have been made, because it is right for us to take them incredibly seriously, and transparency will be an important part of that. I should add, however, that if there are lessons to be learned, it is critical that we implement them very quickly. NESO has already said—and the inquiry will discover further details in this regard—that corporate affairs staff are present in the control room at a number of times, but that they do not interfere in any way with operational decisions.”
“Friend’s final point, let me state very clearly that electricity supplies were maintained throughout the June heatwave. No customer demand was subject to disconnection. Statutory frequency limits were maintained throughout the event, and the largest credible loss that could have occurred was also covered. Let me explain exactly what we mean by the margin in this instance. The margin represents the cushion of spare generation above the peak demand that is maintained by NESO, and at no point did we come close to breaching that. It did not indicate any kind of emergency situation. Demand was met, and those are the facts.”
“I thank my hon. Friend for the way in which he has framed his remarks. He is right to say that these are incredibly serious allegations, and we take them with the seriousness with which they should be taken and will take on board any lessons learned. As for his point about the importance of grid investment, we inherited a grid that was not only in dire need of investment, but had not been designed to meet the full needs of generation that had been built for many years and not connected. We are currently constraining renewable energy that has been built over the past few years because it had not been connected to the grid. We are doing that work to ensure that the grid can continue to do what it needs to do. As for my hon.”
“We are also, across Government, continuing to organise exercises—on a much smaller scale—to ensure that Ministers are prepared and that we continue to keep on top of the actions, because these are not one-time events. The water industry, to which the right hon. Gentleman rightly referred, must continue to look at preparedness. That is the wider work that we are taking forward on resilience.”
“I pay tribute to the right hon. Gentleman, and to all who were involved in that incredibly important exercise. I was not aware of it at all until I came into this job and read the full report, as well as the breakdown of all the actions that had been started during his time in office and have been continued by officials now. As he says, the cascading impacts of a national power outage are extraordinary and very quick, which is why we are first investing in the grid to ensure that that remains a very low risk on the national risk register, and secondly taking forward all those actions. I do not have the detail in front of me, but very few of the actions remain open; most have now been completed.”
“Although there is enough generation available on the system to meet demand, NESO would like to have an even bigger cushion on that generation, and that is what the electricity margin notices are for. They were withdrawn because that generation was met, and at no point were any customers disconnected.”
“Yes, I agree. At the risk of repeating myself, electricity supplies were maintained throughout this period. Tight margins were caused by unprecedented warm weather—as I think we can all testify, having lived through it that week—and we were not alone in that. Other European countries were facing similar challenges and similar pressures on their electricity systems because of the extreme weather. I say gently that our aim as a House should surely be to do everything we can to prevent that extreme weather from becoming even more frequent, and I hope we will rebuild some of the consensus on that. My hon. Friend is right to say that the margin notices are a standard operational tool.”
“I have not denied at all that an extreme weather event caused pressure on the grid, but at no time did frequency move outside the normal operating range, at no time did we not meet demand across the country, and at no time were we close to disconnecting anyone whatsoever from the system, let alone to a potential blackout, as he frequently likes to share on social media. We have a robust and resilient energy system that came under pressure, and it responded exactly as it should. The allegations that have subsequently been made about how decisions were made that day are serious and will be taken seriously in the investigations, and we will learn any lessons that come from that, but that does not detract from the fact that we met electricity demand on every single one of the days that it was under pressure.”
“It is right and proper that we are talking about this issue, but I can assure the hon. Gentleman that there is absolutely no complacency on my part or that of the Government. I take my responsibilities incredibly seriously, as do NESO and Ofgem, the operator, and I think he should be careful of his language on an issue as serious as this. [ Interruption. ] He shouts from a sedentary position about blackouts. That is exactly the point I am making: this is irresponsible language. We are not debating across the House, and it is totally irresponsible. I am not sure how much more clearly I can say it to the House, but I can point the hon. Gentleman to some published reading material on the nature of what happened during that week.”
“That is why we are driving forward the biggest upgrade in the grid in generations, and the work that the operators do at NESO is a critical part of that. The system is becoming more complex, which presents opportunities for decentralised energy and for using much more renewables in the system, but it is more complex to manage as well. I am absolutely confident that NESO is able to do that, but this is a lessons-learning exercise and we will learn the lessons from it.”
“In the past two years, during which I have had the privilege of doing this job, my hon. Friend has frequently shared her experiences as an electrical engineer, and she is right. I, too, am in awe of the grid and of the work that its operators do day in, day out as part of the extremely complex job of balancing supply and demand 24/7. I will not get into what the previous Government did or did not do, but they did not do enough. I am not saying that they had no interest whatsoever in this issue, but there was clearly a long period in which there was not enough investment to build the grid that we need for the future. They did not maintain the resilience of the grid or invest enough to ensure that it was able to cope with these kinds of weather events, which we know will become much more frequent, so there has to be increased investment.”
“Gentleman is right to highlight the Public Office (Accountability) Bill, which we voted on yesterday, because transparency is important. I am not seeking in any way to suggest that we should not be transparent, but I am suggesting that we need to let the inquiry run its course so that we can establish the facts before we pass judgment.”
“The right hon. Gentleman asks a number of questions. On his point about the governance of NESO, I engage with its chair but also with the Government’s independent director. NESO is regulated by the independent regulator, Ofgem, which has responded in the last few days by scrutinising and governing the outcomes of the inquiry, as we would expect it to do. On the right hon. Gentleman’s wider point about documents, I am not going to comment on a process that is now under way to establish the truth. The version of events that I have seen suggests that that is not the case, but we are now doing an inquiry to establish the truth about version control, the sharing of documents and everything else. That is one of the key questions in the terms of reference. The right hon.”