My Lords, we welcome the recent NIC report and will consider its recommendations. The Government are committed to reaching net zero through a sustainable, diverse and resilient energy system. This will require significantly increased renewables deployment. Renewables are on track to deliver the majority of electricity by 2030, having reached nearly 50% in the first quarter of this year. The energy White Paper will set out plans to further accelerate renewables deployment.
I declare my interests, as set out in the register. I thank the Minister for that response. Given the NIC’s findings that increased earlier investment in renewables can be delivered at the same overall cost, meeting half only of total demand by 2030, and will not increase costs for consumers, can the Minister give assurances that the Government will prioritise investment in the UK’s world-leading renewables sector in the forthcoming spending review?
The noble Lord will understand that the spending review is of course a matter for the Treasury and that I cannot comment ahead of its decisions. However, we are prioritising investment in the renewables sector. We are accelerating new capacity through the contracts for difference scheme, which gives us certainty to drive private sector investment and has been very successful in driving down costs.
I am grateful to the Minister for that Answer. Do the Government have any plans to go above the 65% renewables target in this NIC report? Secondly—[Inaudible]—the Government not to build any more nuclear power stations. Based on Hinkley Point’s mushrooming costs, which are even higher than HS2’s, they would do better to carry on with more renewables, as the report shows that their costs are coming down significantly.
I think I caught most of that question. The noble Lord is correct that renewables such as wind and solar are now some of the cheapest forms of generation per unit. These technologies are key to meeting net zero but will need to be complemented by other sources of power, including nuclear, which are available when the wind does not blow and the sun does not shine.
My noble friend makes a very good point. The Government recognise nuclear’s potential to support the transition to net zero, as a proven continuous low-carbon energy source. AMRs in particular could support the deep decarbonisation of industry in future.
My Lords, I declare my interests, as in the register. Presumably, the Government accept the NIC’s view that
“renewables alone cannot create a resilient energy system for future decades”.
Following the excellent point made by the noble Lord, Lord Holmes, how many additional nuclear power plants, large or small, are now planned to keep us on the pathway to zero net emissions, prevent power cuts and, I hope, reduce crushing energy bills? Can we have some precision in the plans for this area?
My noble friend speaks with great authority on this point, but it is important to say that renewables will be key to meeting our net-zero targets. However, as I said earlier, they will need to be complemented by sources of power such as nuclear and gas, with carbon capture and storage, and additional flexibility such as batteries and interconnection. We should be prepared to support further new nuclear projects in the years ahead.
Does the Minister agree with the National Infrastructure Commission that hydrogen has a key role to play in meeting our net-zero targets, not least as a storage medium for intermittent renewables? Will the Government therefore ensure that we invest in the hydrogen economy on a similar scale to competitors such as Germany, so that we maintain our leading edge in green hydrogen technologies and do not, once again, miss the bus?
The noble Lord makes a very good point. I hope we will see more hydrogen-powered buses in the front so that we do not miss them. We have an excellent hydrogen strategy. We are investing considerable sums in developing hydrogen. We will have further announcements to make on the subject.
Does the Minister not regret that the recommendations fail to take account of the importance of nuclear power as a reliable, firm, low-carbon baseload element in our energy mix? Should the Government not immediately inform the Japanese Government and Hitachi that they consider it of the utmost importance to revive the Horizon nuclear power station project at Wylfa, Ynys Môn? Will my noble friend also confirm that the Government still intend to contribute to its funding through the construction phase, which would greatly lower the cost of electricity generated? Given the likelihood that Hitachi will cancel the project tomorrow, should the Government not acquire the Horizon site to preserve options for its future?
As I said in previous answers, I agree with my noble friend that new nuclear can play a role as we seek to transition to net zero. It is the only technology that is currently proven, and can be deployed on a sufficiently large scale, to provide continuous low-carbon power. We will be prepared to support further new nuclear projects in the years ahead if they can show that they provide value for money. We continue to engage with all developers.
My Lords, I suggest that the Government might like to encourage small-scale hydrotherapy—sorry, hydroelectric. I have seen a small village in Colombia supported by a mere drop of eight metres, giving 3 kilowatts. There are many hills above our coastline. Should we not be encouraging more people to use water as a source of electricity?
The noble Lord might want to re-ask his question on hydrotherapy to my noble friend Lord Bethell, who is answering the next Question. We acknowledge the valuable contribution of hydropower to the UK energy mix over many decades. Most hydropower capacity was of course installed in Scotland last century, with smaller amounts in Wales and England. Most of these installations are still operating and still successful. They account for almost 2% of total electricity generation.
This important report challenges the Government to raise their ambitions to meet the climate emergency and stimulate a green recovery. As the Minister said, renewables accounted for a record 47% of generation in the first quarter of 2020. What impediments does he foresee to meeting the recommendation that 65% of UK electricity should be delivered using renewable energy sources by 2030? How can they be overcome?
As the noble Lord said, we have a tremendous record in deployment of renewables. Renewable capacity in the UK has gone from less than 9 gigawatts at the start of 2010 to almost 47 gigawatts at the start of 2020. We certainly hope to increase that rapid deployment.
As the noble Lord correctly said, a number of very successful interconnector projects already exist and will exist in the future. We think they will make a valuable contribution to our energy mix and to providing security of supply.
At the moment, solar power provides only 2.2% of our energy needs. What are the Government doing to increase this percentage? In particular, why are they not doing more to encourage householders to install solar panels on their roofs?
The noble and right reverend Lord is right that solar will play a critical role in the mix. A number of projects have already been approved and are ongoing. I am sure we will receive further bids for solar power projects in the contracts for difference auction next year.
My Lords, I will press my noble friend to say whether the figure he very kindly gave the House includes energy from waste, whether he will look to increase the contribution that it makes to renewable forms of energy, and in particular whether its benefits will be shared with local communities.
The figures I gave were on total renewable capacity, but my noble friend makes a good point. A number of waste-to-energy schemes have been highly successful. We of course have to recognise that various communities have some concerns. We will always seek to work with local communities to make sure that any further projects are acceptable to them.