Committee for the Economy: Energy Strategy Report

Part of Committee Business – in the Northern Ireland Assembly at 4:30 pm on 23rd November 2020.

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Photo of Diane Dodds Diane Dodds DUP 4:30 pm, 23rd November 2020

Thank you, Mr Speaker. Apologies for my coughing fit earlier. Rather than anything more sinister, it was because I have a dry throat and, possibly, if a politician can say this, because I was talking too much.

I welcome the opportunity to respond to the motion, and I congratulate the Economy Committee on producing the report. It is an exceptionally important issue. I also thank the individuals, academics, organisations and businesses that helped to provide the broad scope of views contained in the report. My Department has engaged with many hundreds of stakeholders in the development of the energy strategy to date, and it is encouraging to see consistency in the themes being raised in the report. I am struck by the positivity and ambition that come through from our stakeholders, and I would like to use today to discuss how the energy strategy can help to take advantage of the opportunities that are open to us.

Many in the Chamber have spoken of the importance of the energy strategy. I agree. Developing a new energy strategy is one of my top priorities. The strategy will set out the vision for our energy system to 2050, and a major programme of work is ongoing to deliver that. It is important to highlight that our strategy will be a living, breathing document. Once published, it will be regularly monitored, reviewed and updated to ensure that it is future-proof and able to respond to developments. Our future success will be built on many people working together, and a collaborative approach has been taken to developing the strategy.

My Department's call for evidence received over 160 responses from a wide range of organisations and individuals. There were also a number of stakeholder events across Northern Ireland. Five working groups comprising more than 70 individuals from over 30 organisations have been established and are working on developing policy options. That is being supplemented by additional research and inputs from academics and international experts. In developing the strategy, my Department is therefore drawing on an extensive network from across government, the energy sector and a wide range of stakeholders. The report presented today by the Committee will be considered alongside the evidence that has been gathered to date. That will contribute towards the policy options and future scenarios being developed, which will form the basis of the public consultation in March 2021.

The report correctly highlights the need for a joined-up approach across government. I completely support that view, and I am delighted that the energy strategy is now providing that leadership. The energy strategy government stakeholders group brings together central government, local government and the Utility Regulator to ensure that the policies and programmes being taken forward at this time across government are aligned and joined up. There is also significant membership across the five working groups from central and local government, alongside industry and stakeholders, to ensure that the development of policy involves all those who have a role in delivering it from the outset. I welcome the fact that the Department for Infrastructure is leading on the transport theme in the energy strategy, which demonstrates that a cross-departmental approach is being taken. I want this to be a true, Executive-wide energy strategy, and that is reflected in our approach.

I agree and recognise that there is a need for clear and ambitious targets. We continue to work within the context of net zero emissions by 2050. That will guide the focus of the strategy. I am also working closely with the Environment Minister to ensure that any future targets on emissions reductions will be reflected in the energy strategy. The Committee Chair referred to the need for measurable targets. That is a key part of the ongoing work. I have already made a strong statement on my ambition for the strategy to contain a target of at least 70% of our electricity consumption to come from renewable sources by 2030, which is one of those immediate actions that the Green Party leader referred to in her contribution. That provides a clear signal to the industry and wider stakeholders to allow them to begin to plan investment now in advance of the strategy being published.

However, if we are going to meet ambitious targets that will be in an energy strategy, the Executive will need to reflect it as one of their top priorities. I expect to see a prominent role for the energy strategy in addressing climate change and growing a green economy in a new Programme for Government. We will also need to ensure that the ambition within a new energy strategy is backed up by funding to reflect its importance for society, the economy and consumers. There are many steps that we will need to take to decarbonise energy, but our first priority has to be energy efficiency. I welcome the fact that this has been identified as a priority in the report. Energy efficiency can play a vital role in driving down emissions, helping to tackle fuel poverty and providing positive health outcomes. Energy efficiency and retrofitting are also widely being recognised as an important policy lever for green economic recovery, with significant potential for job creation going forward. It reassures me to see that many of the report's findings align closely with the work currently being taken forward to develop policy options in that area.

We will need to look at ways to decarbonise heat, power and transport. Our success at achieving and exceeding 40% renewable electricity targets demonstrates what we can achieve with a clear target and supporting policies. Our renewables base is a fantastic asset to have, particularly as the electrification of heat and transport will feature in our future energy mix. I see a clean, indigenous renewables base being key to our future energy mix. Every kilowatt-hour of energy that we generate from indigenous renewables is a kilowatt-hour that we are not importing fossil fuels. However, I am also clear that there is no single solution, and we will need to deploy a range of technologies and approaches and make use of our other assets, such as our agriculture base and modern gas infrastructure. The options consultation in March 2021 will outline short-term, low-regret options, as well as the long-term potential scenarios that we can achieve our aims.

I want to specifically highlight the crucial role of consumers in this energy transition. Consumers are at the heart of the strategy and will be involved in its development and implementation. We need to enable those consumers who want to be active in generating and trading energy while also protecting others, particularly the most vulnerable.

We need to rethink our relationship with consumers and make that a two-way engagement with the energy sector that brings citizens on the journey with us. The provision of a one-stop shop to provide information, advice and support to consumers came through strongly in our call for evidence. My officials are looking into options for a single delivery body as part of the strategy development.

Costs are, of course, key for consumers. A long-term energy system based around clean, indigenous renewables that makes use of our abundant natural resources can be cheaper, but there will be investments, with associated costs, along the way. That is why an evidence-based approach is being taken to the development of an energy strategy, to identify the most cost-effective options for domestic and business consumers.

I also want to use the energy strategy to grow a green economy. When I published the medium-term plan for rebuilding a stronger economy in June 2020, which has been referred to in the Chamber today, I identified clean energy as a priority for future investment. We currently have a low-carbon, renewable energy economy made up of 3,500 businesses, around 5,400 jobs and £270 million of exports. It could be so much larger. In the context of our response to COVID, there are real opportunities for economic recovery through decarbonising energy as part of growing the green economy across Northern Ireland. I see those opportunities to lead the way in green hydrogen production and to have a world-class manufacturing base contributing to supply chains for, for example, offshore wind, hydrogen buses and electrolysers; innovative pilot projects in new energy technologies that can be scaled up and deployed across the world; and significant capital investment in buildings and the new infrastructure needed to generate and distribute low-carbon energy. I also see opportunities for energy entrepreneurs and business start-ups to develop skills in green energy technologies, low-carbon buildings and transport.

I am excited by the developments in the hydrogen economy to date. There is a range of potential projects that can showcase our ability to develop cutting-edge hydrogen technology in Northern Ireland. That was mentioned by Kellie Armstrong and Paul Frew in particular. I am delighted to have been able to provide funding to Northern Ireland Water to trial an innovative commercial-sized electrolyser as part of its waste water treatment works.