Lord Berkeley (Lab)

My Lords, Amendment 74 in this group is in my name. It seeks to ensure, in the creation of GB Energy and the delivery of its objectives, a specific consideration of decarbonisation challenges faced by the 1.7 million households in the UK that are not connected to the gas grid—I declare an interest in that I am one. An awful lot of other people—including many noble Lords opposite, I am sure—are not connected to gas and will have to use electric. The amendment provides for direction to be given to GB Energy to review the decarbonisation challenges that these households face but also, importantly, to consider the solutions that exist to help them do so practically and affordably. They include the value of adopting renewable liquid fuels. Taking into account the recommendations of GB Energy, the amendment would also require the Secretary of State to implement existing measures within the Energy Act 2023 that would help off-grid households—namely, to hold a consultation on the benefits of introducing a renewable liquid heating fuel obligation or RLHFO. This measure secured all-party support in the last Parliament but has not yet been implemented. I hope that my noble friend will look at this again. To go into a bit more detail, the challenges facing off-grid households, which are mostly in the countryside, are their existing energy efficiency, location, age and construction. As many noble Lords will understand, this means that these households will face substantial challenges to decarbonise using technology based on electrification. The research undertaken by the department and the Scottish Government shows that installing a heat pump in such a house, including full retrospective costs and the cost of servicing, will cost off-grid homes on average over £21,000, which is unaffordable for many. I am concerned that there will also be an impact on the local grid. We tend to forget about the local grid. If everything is to be heated by electricity, placing unmanageable pressures on the grid, we need to have a good grid. In the National Grid’s Future Energy Scenarios report, the scenario “Leading the Way” has estimated that to achieve clean power by 2030, 1 million properties in the UK will require a solution other than electric heating, due to the high cost of local networks. There are probably several solutions, but the one I want to describe briefly is that renewable liquid fuel can make decarbonisation affordable and practical for off-grid consumers, significantly reducing emissions and delivering on the carbon budget. It will help deliver clean power by 2030 and the commitment that no one who does not want to will be forced to remove a boiler. In Cornwall, where I live, a fuel distributor has successfully created the country’s first renewable liquid fuel village, in the coastal village of Kehelland, converting homes, businesses and the local church and schools to a fuel called HVO. It has been a fantastic success in helping residents to reduce their carbon emissions and allowing them to play their part. I appreciate that my noble friend’s ministerial colleague in the other place gave evidence on this issue the other week, but she referred to issues of supply and cost to consumers. I was concerned to hear that the department may be delaying the Energy Act consultation. I hope that is not the case, because this consultation needs to go ahead. I know that the industries that support off-grid households found that she said something rather surprising, given that there is clear evidence that should reassure my noble friend and his colleagues.