Amendment 12

Part of Crown Estate Bill [HL] - Committee (1st Day) – in the House of Lords at 5:45 pm on 14 October 2024.

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Photo of Earl Russell Earl Russell Liberal Democrat Lords Spokesperson (Energy and Climate Change) 5:45, 14 October 2024

My Lords, I will speak to my Amendment 31. I apologise in advance that I have no “Monty Python” sketch references, but I support the amendments from the noble Lord, Lord Young, and the other amendments already spoken to.

Amendment 31 seeks to give an explicit power to Crown Estate commissioners to lease parts of their holding in exchange for either part or full ownership of any project or development, as the commissioners see fit. For the sake of clarity, the full wording of the proposed new Section 3(1)(a) of the Crown Estate Act 1961 is:

“The Commissioners may waive lease fees in exchange for full or part ownership of any project or development”.

I say this only as the Member’s explanatory statement used the word “land”. My amendment is intended to—and does, as far as I am concerned—cover all the Crown Estate’s holdings. That is particularly important because, as we all know, most of its money comes from the leases of the seabed. This amendment is designed to help the Government and the partnership with GB Energy. It is designed to help the Crown Estate itself. I want to see a transition to net-zero power by 2030. I welcome that commitment from this Government.

But I also want to see us grow and develop as an economy and as a country. I want the energy transition, which is arguably one of the greatest transitions in our use of energy since the Industrial Revolution, to be of benefit to ordinary people. I want the UK to be able to own at least parts of our new energy infrastructure—the energy infrastructure of the future. That is my thinking in my amendment. I want the UK to receive long-term benefits above and beyond just the green and environmental benefits that come with these things.

The Crown Estate generates its income primarily from the lease of seabed plots for offshore wind and floating offshore wind developments. The Crown Estate reported record profits for 2023-24 of £1.1 billion, boosted by round 4 sales. Round 5 of the offshore wind auction was not as successful but we have just had a successful round 6, which I welcome, which generated some 4.9 gigawatts of capacity but at somewhat lower prices than in round 4. Labour has plans to generate 20 to 30 gigawatts of offshore wind capacity by 2030. For context, that is enough to power 20 million homes.

We still have quite a long way to go with this offshore wind and floating offshore wind transition in particular. The hope is that £8.3 billion of investment by the Government will help to leverage some £60 billion of private investment. It is interesting that we are talking about this today, the day on which the Labour Government are holding their investment summit. I wish them well with that because the UK economy needs to grow and we need inward investment to do that.

We welcome, obviously, the plans for GB Energy and this partnership and tie-up with the Crown Estate. But although I very much welcome Labour’s ambition to decarbonise our power generation by 2030, it is worth noting that GB Energy will not be an energy supplier or own any energy generation assets. To my mind, that is a missed opportunity and I think we could do better.

To quote the Labour Energy Forum document title, Who Owns the Wind, Owns the Future. The Floating Offshore Wind Task Force has predicted that floating offshore wind could be the UK’s biggest industrial success by 2030, worth £47 billion to the UK economy and employing some 10,000 people. We should never lose sight of the fact that the UK is well placed and is estimated to be the third-best country in the world for the generation of wind energy. We are extremely lucky in that regard.

Other significant parts of the Bill seek to make rights that were implicit in the 1961 Act explicit. From my reading of the original Act, I can see no reason why the Crown Estate could not waive lease fees in exchange for part-ownership of offshore or floating offshore energy wind projects—but, at the same time, I can find no implicit right in the original Act. Frankly, I think there should be an implicit right.

As far as I can tell, the Crown Estate does not own or part-own any offshore wind installations now. It has a helpful page on its website that shows who owns all the offshore wind under its control. In many cases it is foreign Governments, hedge funds and other nations and their capital which own it. In 2022, for example, nearly half the UK’s offshore wind capacity was owned by state-owned or majority state-owned foreign companies. They are getting the long-term benefit of the investment in our third-best wind energy in the world and are using it to support their economies.

I want our wind energy to generate and support our economy. While leasing plots brings in revenues, part-ownership of the infrastructure itself could bring in much-needed longer-term and consistent revenue streams to the Crown Estate. I believe there is greater long-term financial gain from part-ownership of energy infrastructure than from simply leasing the seabed.

This would be good for the Crown Estate. As we have heard today, the Crown Estate is in a period of transition and allowing it the ability to explore this, if it wants to, would be useful at the start of the partnership. I also believe that allowing this to happen could be useful for the generation of small-scale community energy projects. This is something that I believe in strongly and would like to see the Government do a lot more of, and this amendment would be useful in helping that to happen. It could be the basis of a new model for the way the Crown Estate works, generating much smaller, local community benefit projects.

This would be good for energy transition, good for the Crown Estate, good for the UK economy and good for jobs and growth. I welcome your Lordships’ responses and look forward to hearing from the Minister. I hope that this amendment finds approval.