It is a pleasure to serve under your chairship, Mr Efford. I submitted this motion before the power failures at Heathrow and the Iberian peninsula, before the latest run of cyber-attacks, and before international conditions led us to increase our spending on defence. A more volatile and uncertain future is changing the question that we expect our energy system to answer but, as an engineer who spent years working on low-carbon energy technology, I know that the question changed before that.
The question changed when offshore wind became our cheapest source of electricity and when the payback period for photovoltaics dropped below just a handful of years. The question changed when the world woke up to renewables and we, an island nation with exceptional wind resource, favourable geology and a skilled energy sector, realised that we could become a clean energy superpower.
The prize is lower bills, increased security and the re-industrialisation of our economy, with all the jobs, innovation, trade and growth that come with it. To win that prize, our electricity system will need to double in capacity, accommodate dispersed, wild and unpredictable generation, and support varying demands that will become more mission-critical for our economy and everyday lives.
I commend the hon. Gentleman for bringing the debate forward. Whether we like it or not, we must be aware of and consider these important matters. The Climate Change Act (Northern Ireland) 2022 established that the Department for the Economy must ensure that at least 80% of electricity consumption is from renewable sources by 2030. Unless we can harness reliable tidal energy, we are dependent on conditions that cannot be predicted. That must be considered.
Yes, diverse energy sources will be critical for future system resilience.
The Minister has clearly shown that the operational constraints for a robust electricity grid are known and in hand. The challenges of a future electricity system go far beyond those we face today. Three quarters of a century ago, when our energy systems were built in the shadow of world wars, resilience was front and centre, but the guiding star was efficiency, ensuring that energy taken from the ground was transferred with minimal loss. The defining challenge of tomorrow is to take energy that appears in places and at times determined by the weather, and deliver it in places and at times determined by the people who depend on it.
I was delighted that Bethlem Royal hospital in my constituency recently secured a £725,000 grant from the Government to install solar panels. Does my hon. Friend agree that when used in partnership with back-up generators for essential services, on-site renewable energy generation will protect organisations from rising costs and provide greater energy resilience for their non-essential services?
I agree that with the correct technology, those systems can provide local resilience.
The fundamental change to the core role of the energy system has been from efficiency to storage. How we achieve that future system is already well debated. We start with energy efficiency and insulation, then we move on to shifting the time of demands, and we can enhance that with intraday storage in some buildings. The way we actively control and manage the response to demands and our storage is the big question for the future electricity system.
Currently, moment-by-moment control is achieved technically using the A/C power itself as a signal. Control over longer time bases is co-ordinated and partially directed through markets. In the future, we expect markets to play a bigger part in our electricity system, working in shorter timeframes and in a more distributed way. When we think about resilience, the design of our economic and commercial energy system and the digital systems that enact it will be absolutely critical. The commercial energy system will be as critical as the physical one.
Whereas markets may be good for some resilience attributes such as flexibility and diversity, they are often bad for others, such as redundancy, continuity and headroom. Also, our new digital communications channels offer potential single points of failure for our system. This is a fundamental question of national security. In the light of a string of cyber-attacks, it is crucial that when our digital world fails, our heating, lights, sanitation and vehicles must not. Either our grid must not depend on signals such as dynamic pricing to keep working, or those signals must be multiple-fault tolerant. With distributed generators playing a larger role in future, avoiding cascade failures requires them to support graceful degradation instead of disconnecting in the face of uncertainty.
This dynamic, digitally enabled future can introduce other risks, not only for resilience but for social equity. It must not penalise those who cannot afford battery storage, and each internal system boundary and each new pricing location threatens overall value. Alongside markets, our systems must incorporate core features that function primarily in the public interest. The system must be resilient against market-induced price instability and commercial failures, both for our security and for those markets to function healthily.
I thank my hon. Friend for securing this important debate. The Dorset clean energy super cluster, in my constituency, has proposals for fixed and floating offshore wind, carbon capture and storage, and hydrogen storage. Does my hon. Friend agree that having all that energy generation and storage in one place is a really effective way to boost Britain’s energy resilience, and to quickly boost our energy infrastructure and our ability to create, store and distribute energy here in Britain, rather than being dependent on energy coming in from overseas?
I thoroughly agree with my hon. Friend. I am so glad that Members have identified how critical it is that we have a diversity of energy sources, that we have energy storage, that these are distributed around our system, and that we invest ambitiously now to bring them into reality.
Our energy system has always been multi-vector, and it must be in the future, too. By embracing this reality, we have an opportunity to design and choose how our electricity and gas systems are coupled: upstream through underground gas storage and power stations; mid-system with smaller distributed generators, including fuel cells; downstream in areas on constrained legs of the network; or perhaps even in homes through smart hybrid heating systems. We can deploy hydrogen production wherever it is most helpful: offshore, onshore, or at critical nodes in the transmission system. Pipe infrastructure is relatively low cost, high capacity and, being underground, intrinsically secure.
The size of our supply of green hydrogen is our choice. If we choose constrained supply, we choose constrained growth. If we choose ambition and abundance, that will also be worked out in our economy. It is time to move on from old ways of thinking. There is virtually no risk of stranded assets; investment in both electrical capacity and hydrogen production is zero regret. The call to action for both sectors is simple: go big. That is, and must remain, the message of the Government.
Now is the time to convert this ambition into concrete goals in the technical domain. Industry’s voice is clear: there is an urgent need for decision making. We must deliver our ambition not by iterative cycles of consultation, but rapidly through partnership. We need to short-circuit policy silos, get all the stakeholders in a room and thrash it out. We must be open to answers that back multiple technologies. Our problem is not that we need a silver bullet, but that we had one that was literally too good to be true. Moving on from fossil dependency means diversification.
Thank you, Mr Efford, for chairing this debate. I thank my hon. Friend the Member for Worcester (Tom Collins) for securing it and for all his experience in this area, which is of great value to me and the Government. It is an important topic. I will speak more broadly about the issue of energy resilience, and then come to some of the specific points that he raised. As I said in the House last week, maintaining this country’s energy resilience is a key priority for the Government. As my hon. Friend rightly pointed out, it goes hand in hand with us taking, as fast as possible, the opportunities from new technologies on our path to net zero.
In the context of the widespread power outages experienced across the Iberian peninsula last week, this debate is particularly timely. I praise my hon. Friend for his significant foresight in securing the debate many weeks before both of the incidents that he referred to; that is a real skill that we might come back to. I will repeat what I said in the House last week about all those who were affected. We clearly saw significant disruption in Spain and Portugal on our television screens here, but I was glad that power was restored remarkably quickly.
My thoughts are with all those who were affected, and with those who are now carrying out the work to investigate exactly what happened. A significant number of unfounded claims and speculations have been shared by Members of this House, and across social media, about the cause of the disruption. Clearly, given it was such a significant failure, it will take time for the Spanish network operator to carry out an investigation into its exact cause, and it is important that we wait for that statement before rushing to any kind of judgment.
Turning back to the UK, Great Britain has a highly resilient energy network, largely because of how diverse it is. In recent years, although we have seen high energy prices, our energy supply has remained reliable because we are supplied from more than one source, including the UK continental shelf, our long-term energy partners such as Norway, international markets for liquefied natural gas and interconnectors to the European continent. That means that we are not reliant on any one particular supplier for security of energy supplies, and we are confident that the system operators have the tools that they need to effectively balance supply and demand in a wide range of scenarios all year round. As my hon. Friend set out, storage is also an important flexibility tool in the GB system, allowing us to respond to short-term changes in supply and demand, especially during colder months.
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That all misses the single largest and most novel component of our future energy system: clean, long-duration energy storage at scale—storage, not just for seconds through inertia, not just for minutes through demand-side response, and not just for a day or night through in-building storage, but intraweek and longer to ride through long stagnant weather events or other major disruptions. Today, our energy resilience is assured by the incredible flexibility and capacity of fuels: oil in transport and off-grid heat, and methane gas for heat in buildings and industry. Those fuels intrinsically store energy indefinitely and carry vast amounts of energy through simple infrastructure, such as pipes and tanks. Our gas system currently carries three times as much energy each year, and up to four times as much in a day as our total electricity system. It shares its energy storage capability with the electricity system through gas power stations, our core electricity resilience assets. We have found our dependency on gas to be a weakness, but only because we depend on it for our system’s strength.
So, we face a crux. How might we win the energy resilience prize, benefiting from the clean versatility of electricity and the stabilising, security-critical storage capability of fuel? There is one answer that the UK has itself pioneered. There is a fuel that is carbon-free and 100% interoperable with electricity, and capable of being manufactured from electricity and cleanly converted back into it again at will: hydrogen. The Government, and others, have spotted the unique potential of hydrogen to fuel a clean and secure future for British industry. I would argue that they could go further, enabling industrial renewal in and around national clusters, but also in our towns and suburbs. As we seek to secure a material supply chain, the UK could deploy our immense wind resource and become a circular economy material recovery superpower of Europe.
Over recent years, however, the debate has become paralysed by an either/or question. Electrification and hydrogen have been presented in some sectors as mutually exclusive. Hydrogen has been presented as scarce and expensive. Policy has been asking whether the answer in various sectors is electrification or hydrogen, but the design answer is resounding and simple: it is both. These two energy vectors are complementary, with hydrogen power stations able to provide our grid with headroom, responsive generation and inertia, and hydrogen storage able to provide our national asset of inter-day and inter-week energy storage. Our future electricity system needs hydrogen, and at a vast scale. The truth of the matter is that hydrogen will be as cheap and abundant as we design it to be.
Historically, we have always relied on multiple energy vectors in homes to provide energy resilience. That is still an option now. It means moving away from questions of either/or to answers of both/and. Those decisions are not easy, but they can be made. The end point is not crystal clear, but it is sufficiently in focus. Our industrial community has the knowledge and evidence we need, and the risks from here can be managed.
This is a moment for leadership and, fortunately, this Government have the will and the opportunity to deliver it. As corporate players scramble to shape this debate to create future opportunities, investors are seeking a clear statement of ambition and for the Government to get hands on, set goals and pick winners. Recognising that there will be more than one winner in a diverse and resilient future, we can show ambition now for electrification and a powerful UK hydrogen economy.
In the end, a resilient energy system is about putting people first and making power, warmth and movement dependable, affordable and accessible to all. Seventy-five years ago, the UK built energy systems with world-leading reliability and resilience. Now it is time to do it again, and to secure a new era of economic renewal, growth and security. With ordinary people as our guiding star, through ambition, pragmatism and practical collaboration, we can deliver an energy that, for the next 75 years, through night and day, come rain or shine, dependably keeps every single person in our fantastic nation empowered.
To further protect consumers, Ofgem sets annual targets on customer interruptions and customer minutes lost, which means that companies themselves are directly incentivised to reduce the number of interruptions, no matter the cause. Of course, I work closely with the National Energy System Operator and Ofgem to ensure that resilience is built into our networks wherever possible.
The hon. Member for Strangford (Jim Shannon), who is an ever-present voice in these debates, is no longer in his place, but I wanted to give my regular response to him: although I take the issues of energy in Northern Ireland very seriously, they are devolved to the Northern Ireland Executive and not my immediate responsibility. I think he probably knew that that was what I was going to say anyway.
My hon. Friend the Member for Worcester raised our journey to net zero and what we need to do to ensure resilience as the system decarbonises. We are obviously committed to maintaining current levels of resilience and reliability through collaborative work with industry, the regulator and other stakeholders, and there is a variety of ways in which we can do that.
Obviously, the most common cause of any disruption in our network, here in the UK, is storms and weather events. We have seen lessons learned from storms such as Storm Arwen, which led us to introduce a number of resilience measures. There is also the role of critical new technologies, such as hydrogen, which my hon. Friend raised throughout his speech and can be used in energy resilience. He is correct, of course, that we now have an opportunity to design a clean energy system, and that is why NESO is carrying out new functions that will shape resilience policies on our journey to clean power.
I will briefly talk about what we learn from incidents. Our system is remarkably resilient, but, of course, no system is immune from disruption entirely, so we must plan for all eventualities and learn from incidents when they happen. We do that through working closely with the energy industry to ensure that robust plans are in place. We learn from every incident, in strong partnership with others.
My hon. Friend rightly raised the dependencies in our energy system. The recent example from the Iberian peninsula really brought home just how much our lives are dependent on electricity in one form or another. The point about our telecoms and communications systems, which are so reliant on mains electricity now, is really important for us to consider in these resilience plans; we must make sure that we have back-ups in place. That complex interdependency was also demonstrated by the recent fire at the substation in Hayes, which resulted in the closure of Heathrow airport. Such incidents are incredibly rare, but they occasionally occur in a complex system with many thousands of assets, such as ours.
The Department for Energy Security and Net Zero continues to lead cross-Government work with the Cabinet Office to enhance the resilience of all critical sectors to major energy risks, such as those listed on the national risk register. Events in the Iberian peninsula last week, as well as those in Heathrow in March, highlight just how crucial electricity is to our wider system.
My hon. Friend the Member for Worcester was right to point out that, as we move to a clean power system, the question of storage will be key. That is why I was delighted the Government announced the funding to build the first long-duration energy storage assets in more than 40 years. We have worked to set out the cap and floor scheme so that major infrastructure projects can be delivered. We look forward to those projects coming forward in due course.
My hon. Friend highlighted the role of hydrogen. Although I am not directly responsible for hydrogen, I am as excited by the opportunities it presents as my colleagues in the Department are. It can play a key role in our mission to make the UK a clean energy superpower by delivering new clean energy industries. Although it can provide near-zero emission hydrogen, particularly green hydrogen, as my hon. Friend said, it is not yet available at scale, but there is a real opportunity. He made the point about trying to bring people together to recognise that this is a really exciting opportunity and moment. It is everything that the Government are about through our approach to delivering the clean power mission and unlocking the potential of these more nascent technologies to provide significant resource into the future. That is an important point to put on the record. We are very supportive of what hydrogen can do in our system in future.
This is a very important debate. The question of energy resilience is one that we will return to, quite rightly, because it is never a settled subject. The Government have credible plans in place that we test robustly at regular intervals to make sure that, in the unlikely event they are needed, they work as we intend. It is clearly important that we revisit them regularly to make sure they are as detailed as possible.
I reiterate the point that I made in the House of Commons last week: the UK has a secure and resilient energy supply. Our mission to make Britain a clean energy superpower is the best route to improve our energy security into the future. When we have experienced incidents that threaten our energy resilience, we have used those as opportunities to prepare better for future threats. Preparing for outages is an ongoing task that Government, industry and the regulator collaborate on. We are also taking this opportunity to build not just the clean power system that will deliver climate leadership, energy security and bring down bills in the long term, but the storage assets and everything necessary to make sure we can capture clean power and utilise it when we need it most.
Once again, I thank my hon. Friend the Member for Worcester not just for securing this timely debate and the points that he has made on storage and on hydrogen in particular, but for all the work that he is doing generally in Parliament on these really important issues. As we progress towards clean power by 2030 at pace, rapidly deploying new infrastructure, we will continue to work with all those in the energy sector to maintain the high levels of resilience and security that this country needs.