Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss:

Amendment 118, in clause 115, page 106, line 23, at end insert—

“(4A) Provision under subsection (4), where a gas transporter is conducting a trial involving a fully alternative grid for the purpose of hydrogen delivery, must include guaranteed installation of other forms of low carbon heating by the gas transporter where a household does not wish to take part in the hydrogen grid conversion trial.”

This amendment seeks to ensure that no household will be forced to take part in the trial and will be given an alternative heating solution by the gas transporter (the DNO).

Clause 115 stand part.

The clause defines what we mean by a hydrogen grid conversion trial and expands the duty of the gas transporter running the trial to participants to undertake work without charge. It also extends certain powers of entry contained in the Gas Act 1986 so that they apply for the trial. That will facilitate the effective and safe delivery of a large village hydrogen heating trial by 2025, which will provide crucial evidence to inform future decisions on the role of hydrogen in heat decarbonisation.

Taking timely strategic decisions on heating is critical to meeting future carbon budgets and the UK’s net zero target. Subsection (1) allows the Secretary of State to designate a hydrogen grid conversion trial and ensures that both clause 114 and clause 115 are narrow in scope and would apply only for the purposes of such a trial. Clause 114 also makes certain modifications to the Gas Act 1986 to build on existing provisions concerning powers of entry. That will ensure that the organisation running the trial has clear grounds to enter private properties to carry out any essential works, including replacing appliances and installing and testing safety valves; undertake inspections and tests for the trial, such as safety checks; and safely disconnect the gas supply in a property.

Gas transporters already have powers of entry into properties through the Gas Act. We are extending those powers in a very limited way to conduct the necessary work to set up and deliver the trial. Gas transporters will use the extended powers only ever as a last resort, once all other attempts to contact property owners and reach an agreement are exhausted. The existing rules on powers of entry requiring the gas transporter to obtain a warrant from a magistrates court will continue to apply. No one in the trial location will be forced to use hydrogen.

The gas transporter delivering the trial will develop an attractive consumer offer for participants, as well as viable alternative options such as electric cookers and heating systems, for consumers who do not wish to or cannot participate in the trial. Finally, I draw the Committee’s attention to the fact that most responses to the Department’s 2021 public consultation on facilitating a hydrogen village trial were broadly supportive of our proposals to change the legislation in this way.

Clause 115 focuses on establishing consumer protections for people taking part in this first-of-its-kind hydrogen village trial. It will do so by giving the Secretary of State two delegated powers to make regulations that require the gas transporter running the trial to follow specific processes to engage and inform consumers about the trial and ensure that consumers are protected before, during and after it.

Consumer engagement and support are vital for the successful delivery of the trial. The Department is working closely with the gas transporters as they develop their plans for consumer engagement and protection. Regulations will ensure that the gas transporter running the trial takes the necessary steps to inform consumers about how they will be impacted. That means that people will have the information they need to make an informed choice about whether to connect to hydrogen or accept the alternative offer during the trial. The gas transporter will also need to give adequate notice about the requirement to disconnect properties from natural gas.

The power to introduce regulations for consumer protections will work alongside existing protections such as the Consumer Rights Act 2015 and the Gas (Standards of Performance) Regulations 2005. I am sure that Members of the Committee will agree that the provisions in clause 115, which were well received by stakeholders when we consulted on them in 2021, are crucial to ensure the fair treatment and protection of people in the trial area. The powers will also allow the Department to set out the enforcement requirements for the regulations, which may include civil penalties but will not create any new criminal offences.

The clause addresses some very important issues with the process of hydrogen trials, which are in fact already under way in a couple of parts of the UK. It relates to the first part of the ambition that the Government set out in the energy security strategy: to have village trials, leading perhaps to town trials later and, by the end of the decade, a city trial. Of course, to some extent that is subject to what may be decided in 2026 about whether hydrogen will go into heating systems in general. Even if the decision ends up as a negative and the Government decide not to universalise hydrogen for heating at that stage, the trials will of course be necessary should there be circumstances in which hydrogen can be used on a grid-isolated basis for heating in particular places, and it will be necessary to have the appliances and equipment capable of taking that hydrogen. The Minister will be aware that a number of boiler companies are already producing hydrogen-ready boilers and the like, some which are being used in the village trials.

There are two village trials under way at the moment: one in Ellesmere Port and one in Redcar. Interestingly, public appreciation of those trials is markedly different. One is trying to get everybody on board straight away. In the other, the company running the trial has taken a different approach to universal involvement. We might think that all the properties in a particular area need to be in the trial for it to be entirely valid, but that is not necessarily the case. One company is intending, at rather a late stage of the trial, to introduce a separate hydrogen main into the area. The other trial company is trying to get people on board without modifying the main and will use what was the gas main for carrying the hydrogen. That creates a considerable issue for participation in the trial.

The Minister said that no one would be forced to take part in trials, but at the same time spoke about enhanced powers of entry and various other things, which suggests that the powers could be used to force everyone to take part. That is what amendment 118 is concerned with. It states:

“where a gas transporter is conducting a trial involving a fully alternative grid for the purpose of hydrogen delivery”.

If we wish to adhere to the principle that not everybody has to take part in a trial—there might be many good reasons why people do not want to do so—there must be guaranteed arrangements for the installation of other forms of low carbon heating or indeed for no low carbon heating at all if an alternative main is put in place for people who do not wish to take part in grid conversion trials. Under subsection (4), the amendment would require companies undertaking trials to guarantee the installation of other forms of low-carbon heating, such as heat pumps or low-carbon gas heating. That would enable the trials to bring valid results, and give people in those areas the ability not to take part if they do not wish to do so.

I am sure the Minister will agree that one of the problems being encountered in the hydrogen trials is the question of precisely what the Government think they are doing in relation to participation under these clauses, and the extent to which that is clouding the ability to conduct the trials reasonably in the first place. With at least one of the trials, there has been considerable push-back from the local population because of how they fear it will be conducted. The amendment would enable trials to proceed much more expeditiously, and potentially more successfully, because the people being asked to take part would have guaranteed routes forward if they did not wish to participate. I, for one, wish the trials success—I do not wish to see them undermined—but they need to be conducted on the basis of a clear understanding of how to address the local population’s concerns. That would ensure the trials are a success and shape our thinking about hydrogen and local heating policy for the future.

It is a pleasure to serve under your chairship, Ms Nokes. I rise to support the amendment, because this is a fundamental issue. The Minister talked about households only, but will the offer that he outlined be available to businesses? That is important, because businesses have different energy needs, even in residential areas.

It is important that we take people with us. They must have the option to say no to such trials and get low-carbon heating by another means. That is all I wanted to say on the amendment.

There is another hydrogen trial ongoing—the H100 project in Fife, which is the world’s first trial of green hydrogen for heating and hot water. Like the hon. Member for Southampton, Test, I hope that that experiment is successful.

That trial in Fife highlights the issues that we are debating today. Will the Minister update the Committee on the number of properties signed up to H100? Investigative journalists have reported that the £1,000 sign-up offer was not enough of an inducement to make households sign up. That is the conundrum: it is fine to say that there will be a financial incentive or a consumer offer—the Minister says that we will never need to resort to using the powers in these clauses—but it is clear that some people are reluctant to sign up. If the financial inducement is not enough, how will the Government and the gas operators take those people with them and get this over the finishing line?

It is absolute critical that we take people with us. It is critical that consumers understand the offer they are getting, the risk and the way that the hydrogen trials are being undertaken. It is important that there is transparency in the reporting of the trials. In particular, we need to understand how risks and leakages will be reported. The worst thing that can happen is for rumours or wrong perceptions to circulate.

Amendment 118 is intended to give people an alternative to being part of a hydrogen trial. I support that principle, but that still leaves us with the dilemma of what happens if a household says, “I don’t want to be part of a hydrogen trial and, by the way, you can forget these heat pump things. I am quite happy with my methane gas, thank you very much.” What would happen in that circumstance?

That brings me to the Minister’s argument on Second Reading that the powers will not be used to either force people into the hydrogen trial or leave them disconnected from the gas network. What happens if not enough people are signing up? Frankly, the Government will then have a dilemma. If they want to facilitate these hydrogen trials, they need enough people on the hydrogen network, otherwise the trials will not be sufficient to get an understanding of, or see, the proper operation and benefits of hydrogen.

What will the Government do if not enough people are signing up? How will they facilitate people signing up without forcing them, and how will they get these powers to be successful in terms of mass criticality? There is the old phrase, “You can’t make an omelette without breaking some eggs.” It might well be that the Government are going to upset some people, but they will have to be honest about it. Just saying, “There is no way we will use the powers in the Bill” might be unintentionally disingenuous. I am curious what the Minister’s thoughts are. It is fine to say that the Government will not use them, but that remains to be seen.

I thank hon. Members for their comments. The hon. Member for Kilmarnock and Loudoun is absolutely right that there is a third village trial, which has not been referenced this morning. That is, of course, the H100 trial in the kingdom of Fife. I will endeavour to get an answer to him on how many households have chosen to take part in that. I do not have the figure to hand, but I will write to him with an updated number.

On the other two trials, final decisions have yet to be made on the locations, and details of the exact processes are a matter for the companies and operators engaging in the trial. I thank the hon. Member for Southampton, Test for his amendment. It is very important that we discuss the issues he raised. We have always been very clear that nobody will be forced to use hydrogen, and alternative heating solutions and appliances such as electric heating systems and cookers will be offered for those who do not take part in the trial. As my noble Friend Lord Callanan confirmed in the other place, all consumers in the trial location will have the right to decide whether they use hydrogen or an alternative heating solution for the duration of the trial.

The requirement was clearly established in a joint letter from the then Department for Business, Energy and Industrial Strategy and Ofgem to the gas transporters, which set out the requirements that will have to be met before any funding is provided to the next stages of the trial. It is on the shoulders of the operator to prove that they have community consent to proceed with the trial in a given location. This is a fundamental requirement for the trial. The gas transporters need to demonstrate that they have a viable plan for providing alternatives, otherwise His Majesty’s Government will not proceed with the trial proposal. This obligation will also form part of any future funding agreement.

I think that goes to the heart of what I was getting at. The Minister is saying that the Government will not proceed if not enough people sign up and give consent to the gas network companies. Are the Government basically saying that people effectively get their own referendum or mandate to decide whether the Government’s trials on hydrogen go ahead? It seems to me that it is fundamental to Government policy to test this out, but they are actually saying that by default citizens will decide whether the trials are going ahead or not. That could completely derail Government policy.

I hasten to suggest that what we are doing through this Bill is legislating to facilitate for the operation of those trials within the United Kingdom. The merits of such trials and the procedures through which operators convince or make the case for those trials going ahead will be a debate following our establishment of the frameworks through which we would like to see the trials develop. That is what we are debating through the Bill today.

I would like to say again that there is already an effective way to ensure that the networks provide an alternative to hydrogen. As such, we do not believe that adding to the Bill is necessary for the success of any of the trials. I fully appreciate the intention of the hon. Member for Southampton, Test to ensure that the trials are conducted properly, with alternative systems offered to those who take part.

I realise that I have not answered the hon. Member for Sheffield, Hallam’s question; the same offer will be made to businesses as households. Businesses will be protected in the same way as individual households are as a result of how we have drafted the Bill. I hope hon. Members are reassured that there are already steps in place to ensure that everybody is protected and that there is a choice. I hope the hon. Member for Southampton, Test will find it within himself not to press his amendment to a vote.

Question put and agreed to.

Clause 114 accordingly ordered to stand part of the Bill.