Tag: Grant Shapps

The statement made by Grant Shapps, the Secretary of State for Business, Energy and Industrial Strategy, in the House of Commons on 29 November 2022.

With permission, Mr Speaker, I will make a statement on energy security.

Over half the gas we use in this country is imported. A third of all our energy comes from other countries. Each click of the thermostat and every flick of the kettle sends our money abroad. We are lucky that we have access to secure supplies and strong alliances, but while the price of energy is dictated by the whims of international energy markets, it will be hard to release ourselves from the grip of high bills ushered in by Putin’s brutal invasion of Ukraine.

The solution is energy sovereignty. We have the ability to generate our own energy here in the UK. We need only look at our renewables to know we are already doing this rather well, but it is time for us to do more: to bring energy home; to clean it up; to reduce our reliance on dirty, expensive fossil fuels; and to create a thriving, secure and affordable energy network. We will use the might of our many brilliant engineers, experts and innovators to build a system fit for the future.

As I mentioned in questions earlier, yesterday I was in Suffolk where, thanks to Government investment, the development of the Sizewell C nuclear plant has been given the green light. It will generate not only cleaner, cheaper, low-carbon electricity for the equivalent of 6 million homes, but 10,000 jobs during construction and thousands more in the supply chain. This is the first direct stake a Government have taken in a nuclear project since 1987, and it is the first step on the ladder to long-term energy independence. This has been long awaited, and to boost the nuclear industry further we will work fast to scope and set up Great British Nuclear. With GBN we are aiming to build a pipeline of new nuclear projects beyond Sizewell C where they offer clear value for money, and we will make announcements on this early in the new year.

It is not just nuclear of course: in order to strengthen our energy sovereignty we must look to our natural resources. This island is, as students of Shakespeare will know, a “fortress built by Nature”, and we are utilising that which nature has bestowed upon us—the howling winds of our coastlines, the crashing waves of our sea, and the radiant sun across our land—to create green, clean, cheap energy at home for us.

Those industries are booming, providing jobs and growth up and down the country. In fact, earlier this month, the country hit a truly historic moment, when our onshore and offshore wind farms provided more than half the UK’s electricity. Furthermore, the National Grid reported that on that day all our renewable energy combined provided 70% of the country’s overall electricity needs. However, we need low-carbon back-up for those days when the wind is not blowing and the sun is dimmed, which is why I have put the Energy Bill back on track. It will fire up our nascent hydrogen and carbon capture industries by providing new business models and liberating private investment. The Bill will hammer into place the high-tech solutions we need to produce our own energy.

Even after record Government support for household and business bills, the British people need us to take bold action, and the war in Ukraine, combined with sky-high energy prices, has put a spotlight on the importance of energy efficiency. Our ambition is to reduce energy demand by 15% by 2030. That will be backed by £6 billion in cash between ’25 and ’28, coming on top of the £6.6 billion we have already spent during this Parliament.

The majority of British houses are, thanks to their Victorian builds, rather draughty. Our energy performance certificates did not really bother the estate builders of the 19th century, which is why our ECO+ scheme will help households install insulation, saving them hundreds of pounds off their bills each year—money they can spend elsewhere to grow the economy.

Energy sovereignty is now within our grasp. Clean, affordable energy for households and businesses is not a pipe dream; it is a project we have now embarked upon. Building new energy networks will create jobs; producing our own renewable energy will keep bills low; and as businesses and households are relieved of the pressure of crippling bills, the economy can flourish and grow. Energy is coming home.

The statement made by Grant Shapps, the Secretary of State for Business, Energy and Industrial Strategy, in the House of Commons on 29 November 2022.

It will not be news to hon. Members that in the past year, Putin’s barbaric invasion of Ukraine has sent energy prices soaring.

Without this Government’s support, it would have sent thermostats sinking this winter, too. We have taken decisive action to keep homes, businesses, hospitals, and schools warm this winter. But if we are to avoid foisting this crisis on to future generations, we must think about the years to come, too.

This Government are investing now in a long-term plan, deploying transformative technologies to secure a cheaper, cleaner, reliable supply of energy for Britain and laying firm foundations for growth.

We are one of the biggest economies in the world, but for far too long our energy dependency has threatened to make us vulnerable, when the price of our energy is dictated by the whims of international energy markets.

To put a stop to this situation, we are securing our energy sovereignty.

We are building an energy system fit for the future, by delivering low-carbon energy and greater energy efficiency. We will continue working with our allies, whilst reducing the impact of international energy markets on our energy system.

By developing our world-leading renewables and investing in new nuclear, we will generate home-grown British energy for British families and businesses, boosting British jobs and British growth even as we transition to net zero.

Energy sovereignty is within our grasp. Clean, affordable energy for households and businesses is not a pipe dream, but a project we have now embarked on. Today I am setting out the steps we are taking on our path to energy freedom, delivering opportunity, security, and prosperity for all.

Investing in nuclear power

Nuclear power will be at the core of our threefold mission: to secure our energy supply; to supercharge growth; and to cut our carbon emissions. Today, it was announced that we have delivered on our commitments in the autumn statement, and that the Government will progress Sizewell C.

Our investment, the first made directly by a Government in nuclear power for 30 years, will drive forward the project’s development, and confirm the Government as a project shareholder. Next year, the Government, EDF, and the project company will work together to raise private capital under our new regulated asset base funding model for nuclear.

This is a truly significant moment, and our biggest step so far towards increasing our energy independence. Sizewell C will create 10,000 highly skilled jobs for the area and provide cleaner, cheaper, low-carbon electricity for the equivalent of 6 million homes for over 50 years.

Great British Nuclear

We remain committed to developing a pipeline of new nuclear projects beyond Sizewell C, where these offer clear value for money for taxpayers and consumers. We have been working at pace on the scoping and set up of Great British Nuclear, with the support of industry, and we will make an announcement on the set up of GBN early in the new year.

GBN will be tasked with helping projects through every stage of the development process and developing a resilient pipeline of new builds. We will back it with funding to support projects to get investment ready and through the construction phase, while recognising the challenging fiscal environment outlined by the Chancellor at the autumn statement.

GBN will enable the delivery of clean, safe electricity over the decades to come, protecting future generations from the high prices of global fossil fuel markets.

Boosting energy efficiency

We must do all we can to boost energy generation, but we can also make sure that none of us uses more than we need.

The days of wasting energy are over. Boosting energy efficiency with warmer homes and buildings is key to bringing down bills and boosting jobs along the way with green growth.

We are aiming high, with a target to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030. We are also providing the money to get there, with a new £6 billion investment from 2025 to 2028 that comes on top of the £6.6 billion we are already spending over this Parliament.

Installing insulation in hundreds of thousands of homes across the country will save consumers around £310 a year through our ECO+ scheme, making our energy system more resilient and secure by slashing energy demand.

We recently launched a consultation so that we can make sure that the right support gets to the right people in the right way.

The Government have stepped in with an unprecedented package of support for households this winter, but there is more that households can do to help meet our energy demand reduction target and save money on their bills.

The Government are expanding their public awareness campaign to help reduce bills for all households and protect the most vulnerable over this winter and beyond.

Backed by £18 million, this campaign will complement existing Government support schemes. It will use public messaging to help consumers understand how they can reduce their own household usage and bills through making their homes more energy efficient for this winter and next. Moreover, it will provide vulnerable groups with the information they need to reduce energy usage without harming their health.

This information will also be available on the existing Help for Households website.

Legislating to drive investment and to secure our energy future

We have put the legislative vehicle to power up this long-term plan, the Energy Security Bill, back on track; it will be taken forward this Parliament.

The Bill will liberate private investment, driving jobs and growth in every corner of the country. Importantly, it will help to transform our energy industry by firing up the nascent CCUS and hydrogen industries, in which we already have a head start with pioneering projects from the Humber to the Mersey.

The Bill will encourage competition in the energy sector, enabling the economy to grow and flourish by creating opportunity, prosperity, and security with clean jobs, new skills, and cheaper bills.

The letter sent by Grant Shapps, the Secretary of State for Business, Energy and Industrial Strategy, on 27 November 2022.

Letter (in .pdf format)

The statement made by Grant Shapps, the Secretary of State for Business, Energy and Industrial Strategy, in the House of Commons on 31 October 2022.

I am today updating the House on the mergers and acquisition process for Bulb Energy Ltd (‘Bulb’) in special administration.

Bulb Energy Ltd (‘Bulb’) was taken into special administration by an order of the court on 24 November 2021. Ofgem applied to court, with the consent of my predecessor but one, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), based on their determination that the special administration regime (SAR) was the most appropriate route for protecting Bulb’s circa l.5 million customers in the circumstances prevailing at that time—a recommendation which had subsequent BEIS accounting officer and ministerial concurrence.

The court appointed three individuals from Teneo Financial Advisory Ltd (‘Teneo’) as joint energy administrators and, following an application by Teneo, directed they enter into the circa £l.7 billion funding agreement with BEIS to support the achievement of their statutory objective of ensuring continuity of supply to Bulb’s customers at the lowest practicable cost until such time as the company may be rescued, or the business transferred to another company or companies. Bulb’s parent company, Simple Energy, was taken into “normal”—not special—administration on the same date by their secured creditors.

The energy administrators and their MSA advisers have delivered a competitive and extensive sales process over recent months, culminating in their recommendation to transact Octopus Energy’s bid as the optimal way to achieve their statutory objectives. Their recommendation has been reached after an extensive negotiation process to secure the best terms in the circumstances and detailed analysis of the counterfactual options, all of which show less favourable anticipated outcomes and carry significant operational and execution risks.

I have therefore approved the Octopus bid transaction and associated amendments to the existing funding facility and establishment of their new loan facility.

The BEIS-led consultation process on the energy transfer scheme (ETS) has commenced. Subject to Government approval, the energy administrators will arrange for a court hearing date for commencement of the ETS and to enable the completion of the transaction as all agreements take effect by mid-November.

Energy bill relief scheme (EBRS)

Vital businesses, charities, schools and hospitals up and down the country have seen an unprecedented rise in energy prices following Putin’s illegal war in Ukraine, and this new Government will take the difficult decisions when necessary to support our essential British businesses and public sector services. Support has already been introduced to help families with their energy bills this winter, and this new measure will help support growth, prevent unnecessary insolvencies and protect jobs.

The energy bill relief scheme (EBRS) will provide a price reduction for all eligible businesses and other non-domestic customers such as charities, schools and hospitals, who have recently experienced unprecedented rises in gas and electricity prices. The EBRS is a significant Government intervention reflecting the seriousness of the situation we face. It aims to support growth, prevent unnecessary insolvencies and protect jobs.

Subject to the will of Parliament, the price reduction will come into force at the beginning of November 2022 in time to cover energy consumed in October and will apply to the non-domestic customer’s actual gas and electricity consumption. It is intended to run for six months from 1 October 2022 until 31 March 2023. The price reduction will be linked to the wholesale element of a non-domestic customer’s gas and electricity bill. The actual price reduction received will vary depending on the contract type that a non-domestic customer is on, as well as the tariff and volume used. Government will reimburse suppliers in accordance with the scheme.

Funding for the EBRS will be sought through the estimates process. Any future costs for the delivery of the EBRS can only be projections and will depend upon energy usage levels and changes to the wholesale price of energy. As a result, the EBRS will give rise to an uncapped contingent liability. A review of the EBRS will be published after three months to assess effectiveness of the scheme and consider how support might be extended, further targeted, or revised beyond the initial six-month period for non-domestic customers most at risk from inflated energy prices. The Treasury-led review will determine support from April 2023—an update will be provided in due course.

I have laid before Parliament a Departmental minute describing contingent liabilities arising from the energy bill relief scheme (EBRS). It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute giving particulars of the liability created and explaining the circumstances. If the liability is called, provision for any payment will be sought through the normal supply procedure.

I regret that due to the urgency of this scheme, I have not been able to follow the usual timelines for issuing notice at least 14 parliamentary sitting days before the liability begins to be incurred.

The Treasury has approved spending for this proposal in principle. I will continue to update Parliament on this scheme.