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Offshore Wind Industry

Business, Energy and Industrial Strategy – in the House of Commons on 22nd October 2019.

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Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

What support her Department is providing to the offshore wind industry.

Photo of Greg Hands Greg Hands Conservative, Chelsea and Fulham

What steps she is taking to support exports from the offshore wind sector.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Minister of State, Department for Business, Energy and Industrial Strategy

As a result of the Government’s support, the UK is a world leader in offshore wind and a leader in tackling climate change. The third contracts for difference auction in 2019 delivered 5.5 GW of new offshore wind capacity, and the price was £39 per megawatt-hour, which was two thirds less than just four years ago. Our sector deal also paves the way to increase exports fivefold to £2.6 billion a year by 2030.

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

In East Anglia, we want to be champions of clean growth and are very proud that off our coast we are generating 52% of this country’s offshore wind output, but we want to go much further. Can my right hon. Friend assure me that the national grid will be able to keep pace and that we will support technology such as battery storage that will enable us to make the most of our natural asset?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Minister of State, Department for Business, Energy and Industrial Strategy

My hon. Friend can rest assured that the Government continue to upgrade and invest in the electricity system to ensure that it can deliver additional generation. Of course, battery storage technology and other forms of storage are at the centre of any strategy to reach the net zero carbon target.

Photo of Greg Hands Greg Hands Conservative, Chelsea and Fulham

The offshore wind sector has been one of the Government’s biggest success stories, with the delivery of the world’s largest capacity. When I was at the Department for International Trade, we also made it a priority to be able to export that capability. Could the Minister tell us a bit about the work that BEIS is doing with the DIT to continue that work so that we also deliver real economic benefits for our country’s exporters?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Minister of State, Department for Business, Energy and Industrial Strategy

I pay tribute to my right hon. Friend, who spent two years in the Department for International Trade and was an excellent Minister. He has driven a great deal of progress in this area. As he will know, increasing competitiveness and the capability of our supply chain are key to increasing our exporting power, and, through the offshore wind sector deal, the sector will invest up to £250 million for that purpose. I continue to work with my right hon. Friend’s former Department to identify opportunities, and I regularly meet the Under-Secretary of State for International Trade, my hon. Friend Graham Stuart, in his capacity as Minister for investment.

Photo of Melanie Onn Melanie Onn Labour, Great Grimsby

Ørsted recently opened an east coast hub in my constituency. It is committed to providing local employment opportunities as part of its business, but sadly the extension of the non-EEA visa waiver to the offshore wind workers means that some companies can exploit underpaid and overworked foreign labour rather than developing local opportunities. Will the Government commit themselves to ending the waiver next year?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Minister of State, Department for Business, Energy and Industrial Strategy

The Government will absolutely commit themselves to supporting new jobs in the sector. Because of allocation round 3, the contracts for difference auction, we are envisaging 400,000 new jobs in the immediate future, in the next few years. This is something at which the Government are actually succeeding and on which they are working.

Photo of Angus MacNeil Angus MacNeil Chair, International Trade Committee

It was welcome that the Hebridean renewable project won 240 MW in the contracts for difference allocation round, but we need 370 MW to 400 MW for an interconnector. I know that the Scottish island group has enough CfDs to build an interconnector for clean green energy. Is it only the UK that could design a system under which we secure CfDs but Ofgem then says that that is not enough to build an interconnector? Will the Minister ensure that, in these days of climate change, the clean green energy of the Saudi Arabia of renewables—the Hebrides, Shetland and Orkney—is taken advantage of?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Minister of State, Department for Business, Energy and Industrial Strategy

I welcome the hon. Gentleman’s enthusiasm and passion for this technology, but it is wrong to suggest that the CfD auction was a failure, or that it somehow constituted a defeat. In fact, it was extremely successful. As I have said, the price was £39 per megawatt-hour, two thirds lower than the 2015 price of £115. Obviously we are looking at interconnectors, which will be part of the solution to the issue of net zero carbon.

Photo of Sarah Newton Sarah Newton Conservative, Truro and Falmouth

There is huge potential for low-cost, low-carbon electricity generation from floating wind in the Celtic sea. Will my right hon. Friend accept an invitation to pay a visit on 19 November and find out about this exciting opportunity?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Minister of State, Department for Business, Energy and Industrial Strategy

My desire and propensity to visit all these installations know no bounds, and I should be very happy—diary permitting, obviously—to take up my hon. Friend’s offer.

Photo of Wera Hobhouse Wera Hobhouse Liberal Democrat Spokesperson (Environment and Climate Change), Liberal Democrat Spokesperson (Transport)

Does the Minister agree that hydrogen should be made from renewables via electrolysis in the medium and long term?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Minister of State, Department for Business, Energy and Industrial Strategy

The hon. Lady is right to point to the advantages of hydrogen, but, as she will understand, the issue with electrolysis is that it is currently very expensive, so the “green” hydrogen to which she has referred is something that we are continuing to develop.