Energy Focus

Volume 34 Number 1 PGES Energy Policy Priorities April 2017 Low Carbon Heat – the Leeds H21 Project – Dan Sadler, Northern Gas Networks “Trumponomics” – Dr Duncan Connors, Durham Energy Institute Taking On the Energy and Climate Change Brief – Iain Wright, Chair of the Select Committee for Business Energy and Industrial Strategy ENERGY FOCUS

Cutting the strings, but not the interconnectors

This is not an ofﬁcial publication of the House of Commons or the House of Lords. It has not been approved by either House or its committees. All-Party Parliamentary Groups are informal groups of Members of both Houses with a common interest in particular issues. The views expressed in Energy Focus are those of the individual organisations and contributors and do not necessarily represent the views held by the All-Party Parliamentary Group for Energy Studies. The journal of The All-Party Parliamentary Group for Energy Studies Established in 1980, the Parliamentary Group for Energy Studies remains the only All-Party Parliamentary Group representing the entire energy industry. We champion cross-sector energy research and development. The Group’s membership is comprised of over 100 parliamentarians, 100 associate bodies from the private, public and CHAIRMAN’S charity sectors and a range of individual members.

Published three times a year, Energy Focus records the Group’s activities, tracks key energy and environmental developments through parliament, presents articles from leading industry contributors and provides insight into the views and interests of both parliamentarians and ofﬁcials. FOREWORD Executive Council

Disclaimer: The views expressed in Energy Focus are those of individual organisations and contributors and do not necessarily represent the views held by members of the All-Party Parliamentary Group for Energy Studies. Contents 6 February 2017 marked 65 years since the Queen acceded to the throne, becoming the ﬁrst Foreword 3 British monarch to mark their Sapphire Jubilee. She has chosen to celebrate this is a quiet and Ian Liddell–Grainger MP, Chairman of PGES low key manner, as have we with the cover colour of our journal. Energy Policy Priorities 4 Ian Graves, Executive Council, PGES (JANUARY SPEAKER MEETING) Similarly, this session has been a relatively quiet and settled period in politics, although we are just about to discover if the Northern Ireland Assembly can reform, France is going to the polls on Low Carbon Heat - The Leeds H21 Project 6 St George’s Day for the French Presidential Election and we have just had the ﬁnal Spring Budget Dan Sadler, Special Adviser, Northern Gas Networks (MARCH SPEAKER MEETING) from the Chancellor.

Taking On The Energy And Climate Change Brief 8 PGES has established its preferred Energy Policy Priorities which were presented to the Minister Iain Wright, Chair of the Business, Energy, and Industrial Strategy Committee of State for Business, Energy and Industrial Strategy, Jesse Norman MP. This was at the first and Labour MP for Hartlepool meeting of the new year and reports of our meetings are carried inside. Trumponomics - The ‘Art Of The Deal’ and Energy Geopolitics 10 This edition of Energy Focus is being published as we approach the constitutional landmark Dr Duncan Connors, Durham Energy Institute of triggering Article 50 of the Treaty on European Union. This is yet another major change in Ian Liddell-Grainger MP Receives Fellowship of the Industry and Parliament Trust 12 the political world which will have long lasting ramifications for all of us in the UK and the 8th November 2016 energy world. It starts the two year timetable for negotiations leading to the termination of our Membership of the European Union. Parliamentary Office of Science and Technology Postnote No 550 Feb 2017 13 Paul Brack and Aaron Goater of POST Within the Group, we can look forward to a strong Summer session of speakers on heat, energy storage, flexibility and consumer engagement. We will be holding our AGM and Summer Reception Building Our Industrial Strategy 14 on 4th July where we will have the Government Chief Scientific Advisor, Sir Mark Walport as our Government Green Paper and Consultation Guest of Honour. Plans are also in place for later in the year. Energy Report from the Budget 15 Made by the Rt Hon Philip Hammond MP Chancellor of the Exchequer To conclude, whatever the future may hold for UK energy, I am still confident that the Parliamentary Group for Energy Studies, along with its members, will be leading policy discussion. Parliamentary Record 16 Select Committees, oral questions, debates and legislation

ISSN 0265-1734 For non-members, annual subscription rate is £65.00, single copies £27.00 Ian Liddell-Grainger MP Members receive a complimentary copy as part of membership to the Group Chairman, PGES Copyright 2016 Parliamentary Group for Energy Studies. All rights reserved. None of the articles or addresses in this publication may be reproduced, stored in a retrieval An All-Party Parliamentary Group system or transmitted in any form, by any means., electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the Copyright owner.

Printed in Great Britain by First Colour Ltd, London.

2 3 own right. The overarching view a back seat on CCS and hope consumers can play in energy from the workshop is that carbon it will be deployed at the exact management and the impact they ENERGY POLICY targets should look beyond 2050 moment it is needed. It takes can have on how they use energy. since they are the driving force structure, planning and a stable behind how we tackle carbon policy approach to make this Energy in Brexit PRIORITIES emissions. There is also a happen. growing case for increasing our There was a strong consensus Ian Graves, Executive Council, PGES focus on other greenhouse gases Energy as national infrastructure that Brexit presents a unique in addition to just carbon dioxide. combination of challenge and [email protected] The UK energy sector was opportunity. We need to ensure Flexibility – Demand designed in a different era, that Brexit does not bring barriers JANUARY SPEAKER MEETING SideResponse, Management, when requirements were vastly to energy trade. It is therefore SmartGrid and Storage different to the emerging trends important that a post-Brexit deal we see today that lean towards features a mutual agreement The way in which we produce • Carbon targets This is an essential focus for distributed energy and consumer- to continue the free trading of and consume energy is evolving • Flexibility – Demand Side energy policy. Increased flexibility led energy innovations. Despite energy between Europe and the faster than ever before. As is dependent on two key areas this, we must remember the UK. The Internal Energy Market technology develops it opens up Response, Management, Smart Grid and Storage efficiency measures and these where change is required. There reputation of our national brings mutual benefits. new and exciting opportunities to should to be understood and should be greater clarity in policy transmission system is world- help us make the energy systems • Future of gas addressed to facilitate greater to articulate the interdependent class. An integrated macro Consumer engagement of tomorrow as clean and energy efficiency across the nature of what flexibility means approach is vital to maintain customer focussed as possible. industrial, commercial and and how it can be leveraged. This the world class reliability and It is clear that consumer This presents policy makers and In addition, there were themes domestic building stock. must be backed up by a value safety that we currently enjoy, engagement is essential for industry alike with important that ran through the priorities proposition to the consumer and but market-led solutions must commercial success. Consumers decisions on energy policy. and rather than considering these Heat the operator, as well as owners be encouraged. These should be must understand what reward separately, it was acknowledged of assets, to allow demand balanced through coordinated is in it for them so that they The PGES speaker meeting on that they should be incorporated Heat and energy efficiency can side response to flourish. This energy policy, but the focus on are clear on the role they can 10th January was the follow up to within the priorities. These be treated simultaneously, requires a commercially-led, not a reliable, safe and consumer play – they must have clarity the PGES energy policy workshop themes were: especially when we consider that regulation-led, approach to allow orientated approach must be on how they fit in with the that took place in November 2016 85% of the energy consumed in the market to grow and establish front and centre as we move energy networks and this must and was very well attended by • Energy as national the average home is used to heat itself. towards a decentralised energy be complemented with the parliamentarians, academics and infrastructure space and water. Steps should be system. right incentives and support industry. The workshop produced taken to address existing building Storage in particular is rapidly frameworks. some thought-provoking • Transport stock that falls short of energy evolving. As battery prices fall, Transport discussion and the findings of performance requirements. the opportunity for storage to Investment the group were presented to the • Energy in Brexit provide consumer benefit is In the UK today, distributed Group and Jesse Norman MP, Future generation, market growing. Storage classification energy exists on a fairly small In our sector we have the • Consumer engagement Parliamentary Under Secretary design and operation as generation is locking potential scale, but tides are turning. An knowledge and expertise in for BEIS. players out of the market and example is the residential electric abundance on subjects such as • Investment An ideal approach is one stifling progression in this area. vehicle charging market, where energy, efficiency, flexibility and So, what should be the that integrates management It is firmly in the best interest there is currently a large reliance transport but we must make this government’s priorities on energy So, let’s briefly explore each and governance across the of consumers and communities on subsidies for installing a value proposition to potential policy? priority area and the interweaving interdependent areas of the that the market is open and domestic charging points and investors. This requires both themes; energy sector. Policy should competitive without undue where highway charging models industry and Government to work Ian Graves, Director, European move to a coordinated and regulation. are loss leaders. Tomorrow’s harder to bring greater clarity for Business Development at Energy efficiency holistic approach that actively world looks different: electric investors and put the spotlight on National Grid and PGES Executive drives out silo thinking. With a Future of gas the opportunities that exist. Through greater energy efficiency vehicles are set to be part of Committee member presented silo approach to policy we end the same level of comfort wider distributed energy business the group’s findings: up missing critical opportunities It is acknowledged that gas has can be achieved for far less propositions where the role of the to make things work more a major role to play in flexibility. electric vehicle is far more than It became clear from the energy expenditure, generating effectively. After all, gas can be compressed simply getting from A to B. workshop that there were six a dual win, both financially and decarbonised and this gives it main areas of focus: and environmentally. Energy Carbon targets a role to play in the energy plans Despite the potential demand efficiency includes a range of of the future. increase, the impact on the • Energy efficiency approaches, from efficiency in An interesting output from electricity network could be building design and manufacture the workshop was that, due Carbon capture and storage less than expected, even with a • Heat to demand reduction. There is a to the impact of heat on (CCS) is still relevant to achieving large increase in the amount of mix of organisational, financial • Future generation, market decarbonisation, it has been decarbonisation targets. electric vehicles as it will drive and informational barriers that design and operation pulled out as a priority in its Government cannot afford to take understanding about the role that hinder the uptake of energy

4 5 The project has shown that: 6. Total peak year demand = 6.4 TWh used by Northern Gas Networks. The conclusion is that the gas LOW CARBON HEAT - • The gas network has the correct This demand would be serviced by networks have sufficient capacity capacity for such a conversion hydrogen production and storage to convert to 100% hydrogen with facilities: • It can be converted relatively minor upgrades. THE LEEDS H21 incrementally with minimal Hydrogen production capacity of Gas Network Conversion 3 disruption to customers 1,025 MWHHV (305,000 Sm /h) (Section 4) provided by four Steam Methane • Minimal new energy Reformers (SMRs) located at It is possible for the existing gas PROJECT infrastructure will be required Teesside, fitted with 90% carbon network to be segmented and compared to alternatives dioxide capture. This CO2 is converted from natural gas to then compressed to 140 bar • The existing heat demand hydrogen incrementally through Dan Sadler, Special Adviser, and assumed to be exported for Leeds can be met via the summer months over a three- ‘over the fence’ to permanent steam methane reforming year period. This approach would Northern Gas Networks sequestration deep under the and salt cavern storage using mean minimal disruption for North Sea. Such hydrogen [email protected] technology in use around the customers during the conversion. production at large scale is world today fully proven, with worldwide Appliances Conversion (Section 5) production standing at about MARCH SPEAKER MEETING The project has provided costs Hydrogen appliances and 50 million tonnes per annum for the scheme and has modelled equipment for domestic, compared to 0.15 million tonnes The UK, as with most other for the foreseeable future the this gas network for heating and these costs in a regulatory commercial and industrial per annum for the proposed area countries around the world, required quantities do not look cooking. A hydrogen conversion finance model. sectors can be developed. There of conversion. recognises the importance of realistic. would follow a similar process to In addition, the availability of are already a few models on meeting the challenge of climate the town/natural gas conversion Additional intraday storage, which the market, although sales This report suggests that we low-cost bulk hydrogen in a gas change and has resolved, by 2050, undertaken so successfully and together with the SMRs and inter- are extremely low, due to an can significantly decarbonise network could revolutionise the to reduce carbon emissions by within living memory. The process seasonal storage, will supply absence of piped hydrogen. parts of the existing gas potential for hydrogen vehicles 80% of the level in 1990 under will involve minimal disruption a maximum 1 in 20 peak hour Just with the knowledge of this network at minimal additional and, via fuel cells, support a the terms of the Climate Change for the customer (domestic or demand of 3,180 MWHHV. This study, several manufacturers cost to consumers. This would decentralised model of combined Act. This is the biggest energy commercial) and require no will be in the form of salt cavern are showing real enthusiasm significantly contribute to the heat and power and localised challenge facing the world today large-scale modifications to their storage located at Teesside, some for their development. A firm UK’s 2050 and Paris Agreement power generation. although, to date, there has been property. which may be repurposed from long-term plan and significant commitments, remove the risks little investigation or thought The full report can be found on already existing caverns. stimulus would be needed to of carbon monoxide poisoning, Since 2002, the UK has been leadership around the opportunity the NGN website or searching for provide the motivation to develop increase energy storage, undertaking the Iron Mains to decarbonise the UK distribution “Leeds H21 Report”. Inter-seasonal storage of 702,720 and produce the wide range of gas network by specifically potentially remove air pollution Replacement Programme (IMRP), MWhHHV (40 days of maximum equipment required, perhaps in focusing on large cities. from vehicles, and enable upgrading the majority of its average daily demand (coldest the form of a national heat policy. new product development and distribution pipes to polyethylene. 3 The Results year), 209 million Sm hydrogen). Even natural gas (predominantly innovation for manufacturing and This is a risk prioritised, Health This will be in the form of salt Hydrogen Transmission System methane), the lowest carbon industrial businesses. and Safety Executive mandated (Section 6) Demand vs. Supply (Section 2) cavern storage located on the dioxide emitter per unit of energy initiative due to complete in East Humber coast. The UK gas industry is over High pressure hydrogen of any fossil fuel, produces about 2032. These polyethylene pipes The energy demands calculated 200 years old. For the first 150 transmission pipelines are 180 gm/kWh CO2 equivalent are considered to be suitable for for the area of conversion are: A Hydrogen Transmission System whereas hydrogen emits none years, the gas used was locally transporting 100% hydrogen. (HTS) will connect the SMRs and operating around the world (at the point of use). Changing manufactured town gas which 1. Average yearly gas demand = 678 salt caverns to the proposed area today. Similar pipelines have from natural gas to hydrogen has contained about 50% hydrogen The H21 Leeds City Gate project MW (derived from DECC data) of conversion (Leeds) and will be been proposed for carrying potential to provide very deep with smaller quantities of carbon is a study with the aim of capable of transporting at least hydrogen from the SMR site to monoxide and methane. In the determining the feasibility, from 2. Maximum peak yearly demand = the conversion area and hydrogen carbon emission reduction. The 732 MW (temperature corrected the peak supply requirement of early days, this was made by both a technical and economic true carbon footprint of hydrogen DECC data) 3,180 MW. storage sites. In addition, a depends on its source. For distilling coal and later, oil. viewpoint, of converting the connection between the natural example, grid power electrolysis Following the initial discovery existing natural gas network in 3. Maximum peak hour demand = Gas Network Capacity (Section 3) gas transmission system and the has very high emissions whereas of natural gas in the North Leeds, one of the largest UK cities, 3,180 MW (NGN 1 in 20 peak hour SMR has been proposed along demand) Both the Medium Pressure hydrogen made from stripping the Sea, made up predominantly of to 100% hydrogen. with a pipeline from the SMR methane, during the 1960/70s the (MP) and Low Pressure (LP) gas to CCS. Costs for these have carbon atom from natural gas has 4. Peak day average demand = 2,067 UK underwent a nationwide gas The project has been designed to distribution networks within the been estimated at £230 million about 50 gm/kWh CO2 equivalent minimise disruption for existing MW (derived from NGN 1 in 20 peak area of conversion have been conversion programme converting hour demand design parameter) with ongoing OPEX costs of £0.5 including indirect emissions, a customers, and to deliver heat at modelled for hydrogen conversion large reduction over the existing 40 million appliances, reaching a million per annum. the same cost as current natural 5. Total average yearly demand = 5.9 using the network analysis natural gas fuel. Renewable based peak of 2.3 million per year. Over gas to customers. TWh software and data currently electrolysis could be used, but 80% of the UK population now use

6 7 Dermot Nolan, Chief Executive, focussing on sectoral ‘deals’ Ofgem on the consumer aspects and recommended a targeted, TAKING ON THE of the Competition and Markets mission-based approach to meet Authority’s investigation of global, UK-wide and local public the UK’s Energy Market. policy challenges and maximise The session covered a lot of UK advantage for businesses in ENERGY AND CLIMATE territory. The evidence we heard such matters as decarbonising certainly highlighted the need energy intensive industries or for customers to fight back by automating and electrifying CHANGE BRIEF – switching suppliers, but also transport infrastructure. that energy companies need to get their act together to reward We will be keeping a close eye customer loyalty rather than on the upcoming Emissions A COMMENT FROM punishing it. Reduction Plan – it’s vital investors, businesses and house- Brexit inevitably dominates the holds are given certainty around IAIN WRIGHT MP, political agenda and as we leave how the Government intends to the European Union there are meet its future carbon budget serious questions about the commitments. UK’s future energy and climate CHAIR OF SELECT change policy. Our inquiry on the Looking ahead, our Committee Government’s Brexit negotiation will be holding evidence sessions priorities on energy and climate on electric vehicles and their COMMITTEE FOR BEIS change will report shortly. We’ve role in the UK’s transition to looked at areas such as the a low carbon economy. We internal energy market, security will look at barriers to the of supply and cross-border market’s development, charging trading, including the current infrastructure and fears that and future role of cross-border there is a postcode lottery in the interconnectors in security of provision of charge points, as well electricity and gas supplies, as purchase costs and incentives Iain Wright, Chair of the Business, and particular challenges to increase electric vehicle sales. for Northern Ireland. The EU The inquiry will also investigate Energy, and Industrial Strategy emissions trading system (ETS), whether the Government’s climate change, energy standards Industrial Strategy sufficiently Committee and Labour MP for and consumer protection have address the challenges and Hartlepool also been a focus of the inquiry opportunities for electric vehicles. and we heard from witnesses We expect this short inquiry will about the implications of the be part of a wider body of work UK’s decision to withdraw from over the next year looking at A STATEMENT FROM THE CHAIR OF the European Atomic Energy energy innovation. Community (Euratom), including THE SELECT COMMITTEE ABOUT what it means for research and The UK must take advantage development and for future of the economic opportunities THEIR WORK ON ENERGY investment in nuclear power. presented by decarbonisation Dame Sue Ion, Chair, Nuclear and ensure the UK continues Innovation and Research Advisory to be seen as a world-leader in Board, told us the nuclear the transition to a low-carbon industry would be ‘crippled economy. As a Committee we will without [deals] in place’. continue to scrutinise Whitehall In the autumn 2016, our Select change is central to our work We’ve already had some lively policy and action in this area and Committee became the Business, and we will be determined to evidence with energy suppliers We recently published our ensure that the Government and Energy and Industrial Strategy hold the Government to account and with the regulator, Ofgem. Industrial Strategy report, regulators are doing all they can Committee, incorporating in their efforts to develop a low- Our recent hearing followed urging the Government to to ensure the UK moves to an energy and climate change and carbon industrial strategy, tackle announcements of price focus on horizontal policies, energy system which is clean, reflecting the Prime Minister’s climate change, and to secure increases by Npower, Scottish such as boosting skills and affordable and secure. changes to the ‘machinery of reliable, clean and affordable Power and EDF Energy and infrastructure. We also called Government’. As a Committee we energy. we pressed Lawrence Slade, on the Government to step back are keen that energy and climate Chief Executive, Energy UK, and from its current trajectory of

8 9 shifted to military equipment selling gas and petroleum from sector which was replaced by and consumer goods to keep unconventional sources. burning valuable gas, the state THE ‘ART OF THE the populace happy. The Soviet had no recourse but to borrow Union was the only resource Which is where a tome called money. Therefore, Chernobyl rich nation that pursued a crash the ‘Art of the Deal’ (Trump, did fatally compromise the programme of nuclear power 1987) comes in – Donald Trump Soviet Union, not due to political DEAL’ AND ENERGY with the aim of exporting (instead has shown a willingness to talk repercussions but from a fatal of burning) oil and gas for hard to regimes that have become blow to its economy, too weak currency. The upshot was a series detached from the global to survive. In the US context, a GEOPOLITICS: WILL of dangerously shoddy reactors community, the most important parallel may be a revival of coal built quickly and cheaply. Indeed being Russia. A nation that is fired power stations or a restart one reactor achieved a global reliant upon hydrocarbon exports of the nuclear resurgence to notoriety in 1986 – Chernobyl. for most of its foreign exchange. free up more gas for sale on the THE ELECTION OF It is not inconceivable that a Null global markets and therefore Extending this hypothesis to the Sum (Win-Win) Game will be further increasing US dependency United States in 2017, we must agreed by Presidents Trump and on hydrocarbon exports. DONALD TRUMP understand that it has changed Putin that will solve the Crimea from a net importer of natural situation to the benefit of the Imagine a United States reliant on gas, to an exporter and can Russians in exchange for a rise in high oil prices to generate export meet domestic demand. It has oil prices. Along the same lines, revenue and add the effect that MAKE THE UNITED done this through the process of the United States might soften a fall in the price of oil has on a hydraulic fracturing – fracking- its position on Iran, perhaps even hydrocarbon exporting economy. which creates natural gas weakening safeguards for a rise This is the flaw in the ‘Art of the STATES A NET ENERGY ready for exploitation. This has in oil prices. Add in the narrow Deal’ approach, the stakes always brought about a ‘gas revolution’ leadership of OPEC, potential increase and in setting his sights in America; gas power stations regime change in Venezuela on a single goal, Donald Trump are much cheaper to build and and other geopolitical factors has shown that he is willing to EXPORTER? run than coal plants, due to the then, the United States might offer whatever he can offer to necessity for expensive anti- engage in diplomatic trade-offs achieve a given end. Therein lies pollution measures. Indeed, a to guarantee high prices and a the rub; Russia, Iran, OPEC and Dr Duncan Connors, new coal plant can cost as much substantial income from oil and whoever President Trump deals as a nuclear plant because gas exports. with will now have an incentive to Durham Energy Institute of this. Additionally, the gas lobby for price reductions, fully produced by fracking can be As an aside, this could benefit aware that to do so will threaten turned into petroleum through a the United Kingdom as the the United States economy - [email protected] process known as Gas to Liquids North Sea will be viable and something it would never allow (GTL) which the US could also exploration and exploitation in to happen. In short, the United export after legal restrictions on harder to reach locations will be States would have to enter into The election of Donald Trump sectors requiring skilled exporting crude oil were removed encouraged. With the (admittedly an ongoing series of compromise as President of the United migrant labour will suffer and in 2016. contentious) introduction of arrangements to ensure a high oil States has challenged American public debt must be repaid. The fracking, the UK might regain its price to sustain its economy. That political orthodoxy for the first post war economic model of There is, however, one obstacle energy independence and once is the fallacy of this age – we are in the way: the price of oil and again become a net exporter of not looking at a Null Sum Game, time in a generation. Trump the United States will undergo In the final decade gas on the global market is energy. Certainly, the Canadian we are looking at hydrocarbon has proposed scaling back profound changes that will affect of the Soviet Union, too low to justify making GTL oil sands in Alberta will again be exports becoming central to global free trade, restricting many countries, not least nations the USSR was (and Russia is) petroleum to sell. Indeed, the productive, signalling a return to the US economy for the first immigration and protecting that export to the American rich in oil and gas accounting for low price of oil has led to hiatus the high economic growth levels time since the 1920s. However, for America workers from market. However, the United almost half of its export revenue. in the production of oil from the of the past decade and a half. in the 21st century, America competing imports. Additionally, States has an ace up its sleeve. However, in the 1960s the Soviet the President has proposed a With the president’s known coal sands in Alberta and in the no longer has the hegemony it Union attempted to wean itself However, this approach might series of public works funded by affection for deal making, it might North Sea revenues are very low. once held over global energy off hydrocarbon exports under weaken the United States. At increased public debt, whilst at help to alleviate the disruption This situation cannot last forever, supply. Perhaps, to keep the reforms implemented by Kosygin the time of Chernobyl, the Soviet the same time attempting to roll caused by radical changes in there is a finite supply of oil and economy going, a bad deal might intended to increase industrial Union was so dependent on back the state and lower taxes. economic policy. In short, the gas and prices will therefore rise. be the only deal it can make to productivity through incentives. hydrocarbon exports that the United States has ample reserves For President Trump, however, if guarantee its economic survival. This was short lived as the oil oil glut of 1985/86 - where oil This will have economic of oil and gas and it might be in his economic policies happen and prices rise during the 1970s prices fell by two thirds - hit the consequences. Prices will rise a position to export much of its the United States needs export made it easier for the Soviet Soviet economy hard. Add in the if cheap goods from China and production if certain conditions revenue, then the price of oil Union to export more oil than cannot rise fast enough to justify short-term closure of the nuclear Mexico are subjected to tariffs, are met. increase productivity. Focus

10 11 IAN LIDDELL- PARLIAMENTARY GRAINGER MP OFFICE OF SCIENCE RECEIVES FELLOWSHIP AND TECHNOLOGY OF THE INDUSTRY AND POSTNOTE NO 550 PARLIAMENT TRUST FEB 2017

On 28 February 2017, the developed the first complete Industry and Parliament Trust industrial CO2 capture-transport- (IPT) hosted a dinner discussion storage chain in the Lacq basin on the subject ‘A Roadmap of in southwestern France. From Energy Now and in the Future’. January 2010 to March 2013, Total The discussion, chaired by Ian captured, transported and stored Liddell-Grainger MP, featured 51,000 tonnes of CO2 at a depth a speech by Michael Borrell, of 4,500 meters in an old natural Senior Vice-President for Europe gas field. and Central Asia, Total. The dinner provided an informative At Drax, the focus of Ian’s discussion on current challenges Fellowship switched from gas to in the energy sector where Ian biomass. Drax currently provides By Paul Brack and Aaron Goater of POST 7% of the UK’s electricity and was able to share experiences Mike Borrell, Total; Ian Liddell-Grainger from his IPT Fellowship. Ian was able to view the four MP; Nick Maher, IPT [email protected] storage domes at Drax’s handling Ian’s Fellowship saw him spend facilities. During the visit, Ian [email protected] the majority of his time with viewed the Drax trading floor Total and Drax. Two particular where he learnt how electricity is Fellowships are open to all highlights of his time with Total traded as well participating in a Parliamentarians on a cross- POST has released a new POST Overview incentives, hassle, poor return on were visits to both the Shetland briefing on the White Rose Project party basis, and also open to Note on Energy Efficiency. investment, lack of prominence Gas Point and the Research and (Drax’s plans for carbon capture senior House Staff. Fellows have The Government will set out and low confidence in results. Development Centre (R&D) in and storage). the opportunity to work with one Future Energy Efficiency Policy future energy efficiency policies Pau, France. At the Shetland Gas or more organisations - from and proposals in its Emissions Regulatory, economic and Point Ian spent a full day offshore Ian’s IPT Fellowship has given multinational corporations and This POSTnote outlines the Reduction Plan in early 2017.1 behavioural policies could where he received a briefing on him a vital insight into the global FTSE100 companies to social benefits and costs of future Future energy efficiency policy improve UK energy efficiency. the Laggan-Tormore Project energy business. From site visits, enterprises and government improvements in energy choices will also arise from which will supply 8% of the UK’s to the trading floor and examining agencies. Most Fellowships efficiency across various UK Brexit. There is insufficient evidence to gas requirements. Ian also gained new R&D projects Ian was able to consist of 15 days of placements sectors. It then describes the identify which types of policy are insight into the West of Shetland see the industry from the floor to over an 18 to 24 month period. barriers to energy efficiency Energy efficiency improvements most effective. region development and was the boardroom. measures, outlines options can reduce fuel poverty and For any parliamentarians given a full site tour. for future energy efficiency greenhouse gas emissions Industry and Parliament Trust interested in commencing their policy including regulatory and and improve comfort, health, When Ian visited their R&D centre (IPT) Fellowships programme are own Fellowship in the energy economic interventions and wellbeing, energy security and The full POSTnote may be found on in Pau he was given an overview designed to provide MPs, MEPs, sector, please contact Liz Dawson summarises analyses of the economic productivity. of global project management Peers and senior Parliamentary Parliamentary Affairs Manager effectiveness of different policy http://researchbriefings. and insight into new technology. staff with a unique insight into on 020 7839 9405 or email options. Barriers to improvements include parliament.uk/ResearchBriefing/ Since January 2010, Total has business and industry. [email protected]. financial constraints, misaligned Summary/POST-PN-0550

12 13 BUILDING OUR ENERGY REPORT INDUSTRIAL STRATEGY FROM THE BUDGET

Government Green Paper and Consultation Chancellor of the Exchequer,

The Government Issued a consultation for their Business Strategy on 23rd January 2017. The Consultation the Rt Hon Philip Hammond MP closes on 17th April 2017. To submit a response, contact the Industrial Strategy Team on 020 7215 5000 or email [email protected]. The section dealing with energy is shown below. 8th MARCH 2017

Delivering affordable energy and clean growth

Actions under way:

• We have acted to limit policy costs on energy bills and have reduced such costs for the most energy intensive industries by up to around 80 per cent.

• We have doubled support for energy innovation, and are already investing £600 million in support to accelerate the transition to ultra low emission vehicles. Additional funding of £270 million was announced On Wednesday 8th March, the He announced: Initial funding will support in the 2016 Autumn Statement. Chancellor of the Exchequer, research and innovation in the Rt Hon Philip Hammond MP, • Tax incentives to make it easier universities and businesses, in • We are requiring energy suppliers to offer interactive smart meters to every household and small business delivered his first Spring Budget for operators to sell oil and areas like: site in Great Britain by the end of 2020. speech. This will the final Spring gas fields, helping to keep Budget, because from now, the them productive for longer and • developing artificial intelligence New commitments: Budget will be combined with the maximise exploitation. and robotics that will work in Autumn Statement. extreme environments, like • The Government will set out in 2017 a long-term road map to minimise business energy costs. • A panel of experts will be set up offshore energy, nuclear energy Energy topics to examine the issue. and space • To inform this, the Government will commission a review of the opportunities to reduce the cost of achieving our decarbonisation goals in the power and industrial sectors. The review will cover how best to support There was little energy content • A discussion paper on how to • designing and manufacturing greater energy efficiency, the scope to use existing instruments to support further reductions in the cost of contained in the speech, but the help the industry will also be better batteries for new electric offshore wind once current commitments have been delivered, and how the Government can best work with following announcements were published, vehicles that will help improve Ofgem to ensure markets and networks operate as efficiently as possible in a low carbon system. We will made: our air quality also review the opportunities for growth from the energy sector and the opportunities for the UK. The Chancellor announced the One of his most prominent levy control framework for low- • We will publish our Emissions Reduction Plan during 2017, providing long-term certainty for investors. announcements was a review of carbon subsidies will be replaced tax relief for the North Sea oil with a new set of cost controls, • As set out above we will review the case for a new research institution to act as a focal point for work on and gas sector. The Chancellor but he avoided setting out the battery technology, energy storage and grid technology, reporting in early 2017. had “heard… the calls by North details of any replacement until Sea oil and gas producers and the “later in the year”. He deferred Questions for consultation Scottish government to provide changes to the UK’s carbon price further support for the transfer of until his Autumn 2017 budget. 27. What are the most important steps the Government should take to limit energy costs over the long term? late-life assets.” He also announced £270 million 28. How can we move towards a position in which energy is supplied by competitive markets without the “As UK oil and gas production to launch the Industrial Strategy requirement for ongoing subsidy? declines it is essential that Challenge Fund we maximise exploitation of 29. How can the Government, business and researchers work together to develop the competitive remaining reserves and so we will opportunities from innovation in energy and our existing industrial strengths? publish a formal discussion paper in due course,” 30. How can the Government support businesses in realising cost savings through greater resource and energy efficiency?

14 15 PARLIAMENTARY RECORD PARLIAMENTARY ORAL SELECT COMMITTEE STATEMENTS, REPORTS AND INQUIRIES QUESTIONS AND DEBATES 12th December 2016 to 12th March 2017 House of Commons House of Commons Select Committee on Energy and Industrial Strategy Oral Questions - From 12th December 2016 to 12th March 2017

Industrial Strategy: First Review Second Report of Session 2016–17 Energy Questions: 13th December 2016 Sale of Green Investment Bank Published 21st February 2017 Caroline Lucas (Brighton, Pavilion) (Green) Science and Innovation 11 January 2017 Column : 317-330 This report is best summarised by an extract of the conclusions and recommendations. Liz Saville Roberts (Dwyfor Meirionnydd) (PC) We urge the Government to continue to be ambitious developing its industrial strategy and ensuring that it Alan Brown (Kilmarnock and Loudoun)(SNP) Introduction of a Universal Market for remains true to the vision of achieving an economy that works for everyone. Column 600 Electricity Pricing In its response to this Report, the Government should outline a set of clear, outcomes focussed metrics Ian Blackford (Ross, Skye and Lochaber) that can be used to frame its goals and to measure progress in meeting these. We recommend that the Energy Bills (SNP) Government should consider including metrics relating to the following: Justin Tomlinson (North Swindon)(Con) 18th January 2017 Column : 933 • Improving in real-terms earnings per household and closing regional disparities; Caroline Flint (Don Valley)(Lab) Go-ahead for Fracking on Church Land • Reducing differential regional GDP per head between least and best performing nations and regions; Antoinette Sandbach (Eddisbury)(Con) Sammy Wilson (East Antrim)(DUP) Kerry McCarthy (Bristol East) (Lab) • Improving UK productivity relative to comparator economies and closing the gap with the G7 average; Column 608 – 609 19th January 2017 Column : 1066 • Improving UK Gross Domestic Expenditure on R&D relative to comparative OECD economies; Advanced Manufacturing - Low Carbon Swansea Bay Tidal Lagoon • Improving levels of UK investment in ﬁxed capital relative to comparable OECD economies; Energy Sector Chris Elmore (Ogmore) (Lab/Co-op) • Improving the UK’s position in international rankings on basic skills; Albert Owen (Ynys Môn)(Lab) 25th January 2017 Column : 275 • Improving the UK’s position in international rankings on infrastructure; Mr David Nuttall (Bury North) (Con) Column 609 - 610 Trump withdrawal from Paris Climate • Ensuring emissions remain within Carbon Budgets and legal limits for air pollution; Change Treaty • Closing the UK trade deﬁcit; and, Energy Supply Edward Milliband (Doncaster North)(Lab) • Improving the proportion of businesses which scale-up. Jeremy Lefroy (Stafford) (Con) 25th January 2017 Column : 298 Steven Paterson (Stirling)(SNP) James Heappey (Wells)(Con) Oil and Gas Supply Chain HOUSE OF LORDS Dr Alan Whitehead (Southampton, Test)(Lab) Callum McCaig (Aberdeen South) (SNP) Column 610 - 611 26th January 2017 Column : 428 European Union Committee Topical Questions 12th Report of Session 2016–17 Deidre Brock (Edinburgh North and Leith) Energy Questions 31st January 2017 Brexit: environment and climate change (SNP) Steven Paterson (Stirling)(SNP) Science Funding Published 14th February 2017 Mr Iain Wright (Hartlepool)(Lab) Dr Sarah Wollaston (Totnes)(Con) An extract from this report: Stephen Kinnock (Aberavaon)(Lab) Column 794 - 795 The UK is leaving the EU, not Europe. Its environment will remain inextricably linked to the environment of Bob Blackman (Harrow East)(Con) Europe. In many areas, such as species conservation, or air and water quality, it will be vital for the UK and Graham Evans (Weaver Vale)(Con) the EU to continue to co-operate in order to protect the shared European environment, whether terrestrial, Column 614 - 618 marine, or atmospheric.

16 17 Tidal Lagoons Rein in Cost of Energy in Northern Ireland Volume 32 Number 1 General election 2015 – an evidence-based approach? Jamie Stewart, ICIS Volume 32 Number 2 An interview with Angus McNeil MP Chairman of the Energy & Climate Change Select Committee March 2015 CfDs make it even clearer: onshore wind is the way forward Esbjorn Wilmar, Infinergy Ltd December 2015 Wind works Matthew Knight, Siemens Tim Loughton (East Worthing and Mr David Anderson (Blaydon) (Lab) The value of flexibility in achieving low carbon energy Professor Goran Strbac, Imperial College Shoreham)(Con) 1st February 2017 Column : 1010 Mr Barry Sheerman (Hudderfield)(lab/Co-op) ENERGY ENERGY Michael Fabricant (Lichfield)(Con) Toshiba review of its investment in the Danny Kinahan (South Antrim)(UUP) Moorside Nuclear Power Plant FOCUS FOCUS Dr Alan Whitehead (Southampton, Test) John Woodcock (Barrow and Furness) (Lab) (Lab/Co-op) Column 800 – 802 1st February 2017 Column : 1024

Hendry Review Protection from increase on dual fuel bills Keeping the Christmas Lights on Energy policy after the General Election - Flexible demand? Goran Strbac from Imperial College explains the importance and value of ﬂexibility in supporting Stephen Doughty (Cardiff South and Caroline Flint (Don Valley) (Lab) Amber Rudd MP, Parliamentary Under Secretary of State for Energy and Climate Change, cost-effective transition to lower carbon energy future on Page 6 assesses this Government’s record on page 20 Penarth)(Lab/Co-op) 8th February 2017 Column : 428

This is not an ofﬁcial publication of the House of Commons or the House of Lords. It has not been approved by either House or its committees. This is not an ofﬁcial publication of the House of Commons or the House of Lords. It has not been approved All-Party Parliamentary Groups are informal groups of Members of both by either House or its committees. All-Party Parliamentary Groups are informal groups of Members of The journal of the Houses with a common interest in particular issues. The views expressed both Houses with a common interest in particular issues. The views expressed in Energy Focus are those of Parliamentary Group in Energy Focus are those of the individual organisations and contributors individual organisations and contributors and do not necessarily represent the views held by members of the and do not necessarily represent the views held by the All-Party Byron Davies (Gower)(Con) Parliamentary Group for Energy Studies. for Energy Studies Parliamentary Group for Energy Studies. The journal of Jim Shannon (Strangford)(DUP) Swansea Bay Tidal Lagoon Project, Stephen Crabb (Preseli Pembrokeshire) following the Hendry Review

Volume 33 Number 1 An interview with Lawrence Jones, Edison Electric Institute International perspective Volume 33 Number 2 SNP Energy policy – Callum McCaig MP Volume 33 Number 3 EU Energy policy – Gerassimos Thomas, DG Energy (Con) Albert Owen (Ynys Môn) (Lab) March 2016 Labour Energy Policy Dr Alan Whitehead MP July 2016 The abolition of DECC – Statement from Angus MacNeil December 2016 Energy Barometer – Energy Institute Energy Savings Opportunities Scheme Prof. Martin Fry, ESTA and Dr Robert Clay, DECC The new department – Department for Business Energy and Industrial Strategy Energy policy – An International Perspective – Dr Lawrence Jones, Edison Electric Institute Clive Lewis (Norwich South)(Lab) 28th February 2017 Column : 151 Colum 802 – 803 Reinstate the Funding for Carbon Capture ENERGY ENERGY ENERGY Offshore Energy: Humber and Storage FOCUS FOCUS FOCUS Martin Vickers (Cleethorpes)(Con) Alan Brown (Kilmarnock and Loudoun) Nic Dakin (Scunthorpe)(Lab) (SNP) Column 806 - 807 28th February 2017 Column : 160

Topical Questions Membership of the Customs Union and the

Clive Lewis (Norwich South)(Lab) Single Market for the Oil and Gas Industry Energy - the burning question in the Budget Didcot DECC demolished DBEIS rises from the ashes Energy perspectives - Post Brexit, post Obama Energy Taxation review - First reaction from Cornwall Energy on Page 18 Christina Rees (Neath)(Lab/Cop) Alan Brown (Kilmarnock and Loudoun) Dr Lawrence Jones of Edison Electric Institute gives an international perspective

This is not an official publication of the House of Commons or the House This is not an official publication of the House of Commons or the House This is not an official publication of the House of Commons or the House Kerry McCarthy (Bristol East)(Lab) (SNP) of Lords. It has not been approved by either House or its committees. of Lords. It has not been approved by either House or its committees. of Lords. It has not been approved by either House or its committees. All-Party Parliamentary Groups are informal groups of Members of both All-Party Parliamentary Groups are informal groups of Members of both All-Party Parliamentary Groups are informal groups of Members of both Houses with a common interest in particular issues. The views expressed Houses with a common interest in particular issues. The views expressed Houses with a common interest in particular issues. The views expressed in Energy Focus are those of the individual organisations and contributors in Energy Focus are those of the individual organisations and contributors in Energy Focus are those of the individual organisations and contributors and do not necessarily represent the views held by the All-Party and do not necessarily represent the views held by the All-Party and do not necessarily represent the views held by the All-Party Dr Sarah Wollaston (Totnes)(Con) 9th March 2017 Column : 931 Parliamentary Group for Energy Studies. The journal of Parliamentary Group for Energy Studies. The journal of Parliamentary Group for Energy Studies. The journal of Mr Iain Wright (Hartlepool)(Lab) Column 809 - 811 ADVERTISE IN ENERGY FOCUS Contact: [email protected] for details

NEW MEMBERS WELCOMED to the All - Party Parliamentary Group for Energy Studies

Contact: [email protected] for details

18 19 20