At a meeting of the Liaison Committee Philip Dunne MP, Chair of the Environmental Audit Committee, questions Prime Minister Boris Johnson on Energy Security Strategy.
Philip Dunne: This follows on very neatly from what you have just been saying, Prime Minister. My interest is in the cost of living challenge arising from increasing energy prices.
For the last year or so, since economies started to emerge from the pandemic, all our constituents have been seeing astonishing increases in their energy costs—exacerbated, clearly, by the impact of Russia’s invasion of Ukraine. To what extent will the energy security strategy, which you are planning, address the cost of living pressures?
The Prime Minister: I think you have to provide as much short-term relief as you can to people, within the fiscal constraints that we have—the £9.1 billion that we are giving to help people with the cost of energy and abating the council tax—as well as the extra cash we are giving to councils, by the way, Clive, under the household support fund.
We are doing all those things to help people with the cost of living. But we have got to recognise that in the UK we have just failed for a generation to put in enough long-term supply. It has been one of those colossal mistakes. Renewables are fantastic. Offshore wind—I stress “offshore”— has massive potential, but so does nuclear.
This is the country that split the atom; the first ever civilian nuclear power station was at Calder Hall in Cumbria, I seem to remember from my Ladybird book on atomic power. Why aren’t we doing it? Why have the French got 56 nuclear reactors and we have barely six? Whose fault was that? The Labour party obviously, but I leave that to one side.
Mel Stride: And the Lib Dems.
The Prime Minister: And the Lib Dems—thank you, Mel. But we have got to fix it now. I am not going to pretend that we are going to get a nuclear reactor on stream in real time for our constituents in the next couple of years—no. We have got to do lots of other things, including transitional hydrocarbons and basically helping with the cost of living wherever we can. But long term, and medium term, we have got to be looking at big ticket nuclear solutions—Sizewell and other projects—and also at small modular reactors.
Bill mentions the Qataris. The Qataris are just one of the countries that want to work with us on SMRs. There is a huge list now of potential partners for Rolls-Royce to do that.
Philip Dunne: Your Government is the first in 30 years to make a decision on nuclear. I applaud that; I think it is exactly the right thing to be doing. But as you say, it is going to take a decade to bring a major system onstream. How long do you think it will take before a small modular reactor is contributing to the grid?
The Prime Minister: I saw a bit of paper last night saying before the end of the decade. But they will have to go quicker than that.
Philip Dunne: So eight years or so.
The Prime Minister: I’m not going to predict, but if we don’t start now we won’t be fixing the problem. But I am optimistic. We have shown that we can do things really fast; the booster roll-out was unbelievably fast— we have done some things fast recently. I think we should have a look at an acceleration.
Philip Dunne: So there may be scope for your future planning Bill to look at the planning requirements for major infrastructure projects, such as small modular reactors on existing nuclear sites, where they are likely to be welcomed rather than fought. Can I take you back to the transition, which you were just touching on? As we move towards net zero Britain, we will require fossil fuels to continue to support the economy for another three decades. Currently, three quarters of our energy demand in this country is met by fossil fuels—
The Prime Minister: Of our energy demand, not our electricity demand.
Philip Dunne: No, but we heat homes, we use it for transport and so on. Our oil and gas reserves are currently depleting rapidly. What is the prospect for the energy security strategy that you are going to unveil providing some further exploration opportunities for the UK continental shelf?
The Prime Minister: We will look at all those options. The hydrocarbon riches of the world, I’m sorry to say, are still vast. That is a bad thing because we want to move away from hydrocarbons as fast as we can, but it is also, in the short term, a useful thing. There is no doubt that the United States disposes of colossal wealth in oil and gas, and so does the Gulf—so does Iran, by the way. If we could get an agreement on the JCPOA—not to chuck another difficult subject in—then another source of supply might open up.
Philip Dunne: Does this suggest that you’re moving away from the climate change ambitions that you were trumpeting at COP26 in Glasgow only six months ago?
The Prime Minister: No, not at all. And by the way, I think one of the most productive lines of research, and one that we must not close down, is the hydrogen route. Hydrogen could be a fantastic solution, particularly for heavy goods vehicles, for farm machinery, for diggers, for ships— hydrogen really could be the answer. How do you get hydrogen? You get hydrogen out of hydrocarbons. If hydrogen is going to be part of the mix, and I think it is, then hydrocarbons are going to be part of the solution for the long term. That doesn’t mean we’re—if you combine use of hydrogen with carbon capture and storage, then you have a serious long-term prospect for the UK.
Philip Dunne: Hydrogen is derived from processing water—
The Prime Minister: Well, it can be, yes.
Philip Dunne: —and the oil and gas element of it is to provide the energy to drive that process. Are you suggesting therefore that you are looking at a purely grey hydrogen rather than a green hydrogen production technique?
The Prime Minister: I think that you should look at both types—both green and blue hydrogen. People are anxious at the moment about putting in ground source or air source heat pumps to heat their homes, and everybody is worried about having to replace their boilers at vast expense. I think for some people that will be the right solution—I think the price of those things will come down very fast as more are made—but you’ve also got to look at the possibility of going back to where we were, actually, in the ’60s and ’70s, when town gas contained a lot of hydrogen and you could put a lot more hydrogen into the pipes.
Chair: I think we will leave it there.
Philip Dunne: Just one more question, if I may, Clive.
Chair: We are getting very close to time.
Philip Dunne: Okay, final question—
The Prime Minister: But the ambition to keep going on the path towards net zero—no, that has not been adulterated or lost at all.
Philip Dunne: So you would welcome our Committee doing an investigation into the potential for oil and gas exploration while maintaining the ambition of net zero?
The Prime Minister: I think that would be a very useful thing, yes.