- Committee (1st Day) (Continued)
- 8:31 pm
- Amendment 16
- 16: After Clause 2, insert the following new Clause— “Report: energy generation on the Crown Estate(1) Within 12 months of the passing of this Act, the Crown Estate Commissioners must publish a report on the potential for energy generation on the Crown Estate, including consideration of offshore wind turbines and onshore wind turbines.(2) The report under subsection (1) must also assess the potential impact of wind turbines on the Crown Estate on grid capacity and energy pricing.(3) The report under subsection (1) must be submitted to the Secretary of State and laid before Parliament.”
- My Lords, it is a pleasure to introduce this group of amendments. In moving Amendment 16, I will give a nod to the other amendments in the group.This amendment is incredibly straightforward; it simply seeks to assert that generation must match grid capacity and that we should always consider, when moving to these new modes of generation, who pays and when. I say that generation should match grid capacity, but perhaps that should be put the other way around to make the point that grid capacity must be in place before generation, particularly from offshore wind, comes on stream. I would welcome the Minister’s response as to what is currently set out in the Bill to guarantee that grid capacity will be in place and that we will not have a situation whereby there will be surplus generation that is unable to be taken up by the grid and is still paid for and unused—and that pay comes from the energy customers themselves.How will it be ensured, as we move to this right green transition for energy production, that where the costs fall does not have catastrophic consequences? Presently, it seems unclear in the current structure of the Bill how this grid connectivity and capacity will come online to match the potential race for supply, particularly from offshore.Amendment 16, in simple terms, would ensure that grid capacity exists before generation can come onshore and, in that, would ensure that payment is spread fairly across the bill payers—and that those at the sharpest end do not feel the most extreme cost as a result of this transition, as often happens. I beg to move.
- My Lords, I shall be brief. I actually want to say something quite positive about the Government’s approach to this at the moment. I understand the issue completely: offshore wind is a complete waste of time if you cannot connect it to the consumers. That is obvious, and it has not been managed well. I very much welcome the Government’s commitment to achieve that in future, but we had on 1 October the foundation of the National Energy Systems Operator, whose whole role is to make sure that this works. When we passed the Energy Bill that set this up, we did not really give it enough power. It would be very good to hear from the Minister that that will be in progress and will actually happen.Secondly, there is so much at risk for offshore developers. Yes, they can get their contract, their lease and their contract for difference in terms of the price for the low-carbon company. But at the end of the day, if developers do not believe that there is going to be a grid connection, they will not carry out their investment, so it is absolutely in everybody’s interest that we do this. A really good point has been made to the Minister, and I look forward to his assuring us that NESO— the new organisation from 1 October—will have some clout in government decision-making and will co-ordinate this effectively. It needs to have the power and influence to do so, rather than simply being an advisory organisation whose recommendations are ignored because of other private or public finance investment reasons.
- My Lords, I am very grateful to my noble friend Lord Holmes of Richmond for introducing his amendment, which leads this group, which is fundamentally concerned with the generation of energy on assets owned by the Crown Estate. This is even more important now that there is a formal relationship with GB Energy, which has been announced, although I accept that details of the relationship are quite thin on the ground. I entirely support the intention of my noble friend Lord Holmes of Richmond to require the publication of a report on the potential for energy generation on the Crown Estate, and I draw attention to my Amendment 35, which would ensure that no new electricity generation licences are granted without confirmation that a corresponding grid connection exists.The problem of grid capacity, connection and storage is real and important. In May of this year, a House of Commons Environmental Audit Committee report found that in order to achieve net zero targets,“the transmission and distribution network must develop and expand alongside the growth in supply and demand”.It concluded that renewable energy generation may be stunted by “slow grid connections” and “limited grid capacity”. That is the issue I am trying to fix, and that all noble Lords are very much focused on. The Government must continue to look at it urgently if they are to build on the previous Conservative Government’s progress toward our clean energy targets. However, it is not an easy task. Even Green Party parliamentarians have been known to be vociferously opposed to measures to boost national grid capacity. I hear a Liberal Democrat laughing, and I am not entirely sure that that is appropriate. However, in the face of that kind of opposition, I ask the Minister to reassure the House that the Government have a plan to get on with increasing our national grid capacity.At this point, I think it worth pushing the Minister, although we will come back to this on a later group, on the partnership with Great British Energy, which was announced to great fanfare a few months ago. I am still at a loss to explain how the new partnership between the two organisations, the Crown Estate and Great British Energy, will work and what difference it will make; indeed, this is the point of my amendment.
- My Lords, I will address the amendments tabled by the noble Lord, Lord Holmes, and the noble Baroness, Lady Vere, both of which touch on the topic of energy. I will start by addressing Amendment 16, tabled by the noble Lord.This amendment would require the Crown Estate to publish a report within 12 months on the potential for energy generation on the Crown Estate, covering onshore and offshore wind grid capacity and energy pricing. While the Government are not in principle opposed to the Crown Estate producing specific reports on energy generation on its own estate, it is not within its remit or ability to report on grid capacity or pricing. As I have set out previously, the national grid and relevant transmission and distribution network operators are responsible for the UK-wide strategy on grid connectivity, and the new National Energy Systems Operator will be responsible for creating a strategic spatial energy plan, which will provide future clarity on grid connectivity.The Crown Estate has already published, in September, a 53-page report entitled Future of Offshore Wind: Considerations for Development and Leasing to 2030 and Beyond, which looks at, among other things, the prime areas of opportunity for new wind farms. It has also recently published a Marine Delivery Routemap, which sets out its vision for the seabed and coastline.Amendment 34, tabled by the noble Baroness, Lady Vere, would require the Government to publish a report on the scope, nature and expected impact of the relationship between the Crown Estate and Great British Energy within six months of the passing of the Act, and thereafter publish an annual report. The Government have no principled objection to such a report, but the timing might be more usefully linked to the passing of the Great British Energy Bill, currently in the other place, rather than the Bill we are discussing today.
- 8:45 pm
- The partnership between the Crown Estate and Great British Energy is subject to the passing of that Bill. Once it has passed, assuming it does, the nature of the partnership will be subject to an agreement between the Crown Estate and Great British Energy. Given the legislation to set up Great British Energy has not yet passed, a six-month deadline from the passing of this Bill might feel a little arbitrary.
- To answer the noble Baroness’s questions about the partnership between the Crown Estate and Great British Energy, under its strategy, the Crown Estate focuses on activities which meet its statutory objectives but which also closely align with wider national needs, including energy security and sustainable economic growth. The partnership between the Crown Estate and Great British Energy will help support the transformational change which is essential to delivering the Government’s mission to make Britain a clean energy superpower to cut bills, create jobs and deliver security with cheaper, zero-carbon electricity by 2030, accelerating to net zero. The partnership will bring together the best of both the Crown Estate’s and Great British Energy’s expertise, ensuring a better outcome for bill payers and taxpayers.
- Great British Energy and the Crown Estate will collaborate on two core functions. First, they will work together to speed up the process of developing clean energy projects, co-ordinating planning, grid connections and leasing to derisk and speed up projects for private developers to build. This will unlock private investment and speed up the deployment of clean energy infrastructure, boosting energy independence, saving costs for families, creating jobs and tackling the climate crisis.
- Secondly, Great British Energy and the Crown Estate will directly co-invest in clean energy infrastructure themselves; for example, floating offshore wind and carbon capture projects. This would help make the UK a world leader in these industries of the future, creating jobs, boosting our energy independence and producing more clean power for the country.
- It may be helpful to add that the Crown Estate is already required to publish a full set of accounts in its annual report, which is laid before Parliament each year. These account requirements will also apply to Great British Energy. Each of these will have to cover any activities undertaken through the partnership.
- I turn now to Amendment 35, also tabled by the noble Baroness, Lady Vere, which would prohibit the Crown Estate from granting licences for the purposes of electricity generation or transmission without first confirming that a grid connection will be available for any electricity generated under that licence.
- The Crown Estate is not the relevant authority for granting such licences. As I noted earlier, the national grid and relevant transmission and distribution network operators are responsible for the UK-wide strategy on grid connectivity and it is National Grid Energy Transmission which grants the connection licence, with Ofgem as the regulator. The Crown Estate works closely with the National Energy System Operator and National Grid Energy Transmission to deliver export and grid connections aligned with the strategic spatial energy plan.
- Before I end, I want to clarify the difference between the two documents raised by the noble Baroness, Lady Kramer, at the end of the previous group of amendments. The framework document governs the relationship between the Crown Estate and the Treasury. It is a very high-level public document which will be updated to mention the new borrowing powers and, as a public document, that will be published. The memorandum of understanding is a new document that will deal exclusively with specific controls on borrowing and will sit under the framework agreement. This is the document that will be of use to noble Lords in considering controls on borrowing and is the document I committed to publishing ahead of Report. I may have used the two terms interchangeably at Second Reading and confused the two documents earlier in Committee, which I realise was unhelpful to noble Lords. I hope this clarifies the difference between the two documents.