9 May 2023
Peter Aldous backs vital Energy Bill at Second Reading

Peter Aldous backs the Energy Bill which will play a key role in delivering reasonably priced electricity, enhancing energy security and meeting the challenge of climate change, but urges the Government to back Lords amendments that would require Ofgem have a duty to consider net zero and help communities deliver community energy schemes.

Peter Aldous (Waveney) (Con)

I welcome you to your place, Madam Deputy Speaker.

This Bill is welcome, and it can play a key role in delivering a cheaper, cleaner energy system, promoting investment in clean technologies and enhancing our energy security by deploying more home-grown power. The UK has been a global leader in promoting renewables such as offshore wind, but we cannot rest on our laurels. If we do nothing, we will be left behind in the race to attract global investment, which is very much footloose.

The US Inflation Reduction Act and the EU green deal industrial plan throw down the gauntlet, to which we must respond, not necessarily with like for like but by ensuring that we have a regulatory and policy framework that gives investors confidence and certainty. At the same time, we must not forget the demand side. We should be doing better, and we are still searching for the catalyst that will unleash a retrofitting revolution.

I will briefly go through some of the initiatives that are needed to provide the clarity and certainty everyone seeks. First, a duty is needed for Ofgem to consider net zero. It is vital that we keep costs as low as possible for consumers, but expanding Ofgem’s remit to include net zero would unlock more anticipatory investment, which would enable grid reinforcement. This is currently particularly important in East Anglia.

Secondly, introducing a competitive market for major onshore electricity transmission networks is welcome and can deliver real consumer benefits by driving both innovation and downward pressure on costs. Thirdly, the establishment of an independent system operator and planner with responsibility for whole energy system strategic planning is a positive and welcome step towards an improved governance framework.

Fourthly, we need to remove the obstacles that currently block community energy schemes from realising their full potential, and I thus urge the Government to give full consideration to retaining clauses 272 and 273, which were introduced by amendments in the Lords. One of the great challenges of transforming our energy system is that so many people and communities feel as if something is being done to them—as if a burden is being imposed. Community energy schemes enable local people to be part of the solution by participating in the benefits, thereby showing that we are all in it together. As we have heard, hydrogen will be crucial to achieving net zero, and locally, in East Anglia, it has a key role to play. It is very much the new kid on the block. We do not yet know the precise role it will play and, as we have heard, there is a dispute as to who will pay the hydrogen levy. Different views are being expressed on that and it is necessary to consider carefully how best to proceed.

It is also important to send a strong signal to investors by introducing a sunset clause on the powers assigned by the Secretary of State in the Energy Prices Act 2022, which have had an impact on investor confidence, with companies falling out and leaving the sector. The Bill provides an opportunity to amend that Act so as to enable the Government to respond quickly in the short term without unnecessarily impacting on investor confidence in the long term.

My final point comes back to demand-side measures and the need to address the challenge presented by our leaky buildings. Clause 204 is the result of an amendment in the Lords and gives the Secretary of State six months to publish a comprehensive plan to improve UK buildings’ energy efficiency. I urge the Government to commit to doing that and providing firm policies to incentivise improvements across all domestic and commercial buildings.

In conclusion, there are many issues the Government need to clarify, but it is vital, as Energy UK points out, that this Bill is passed with the utmost haste. The pressing need for reasonably priced electricity, for enhanced energy security and to meeting the challenge of climate change head on, together with the opportunity to create exciting and sustainable new jobs in coastal communities such as the one I represent, means that there is no time for delay.