By Will Jones
Andy Burnham has ordered a halt to new wind and solar power subsidies in a Net Zero climbdown aimed at cutting household energy bills after Chancellor John Healey said “cheaper energy” is now Labour’s priority. The Telegraph has the story.
The Government revealed on Tuesday that next year’s auction of contracts for difference (CfDs) – a form of state support for renewable energy projects – will be paused to ensure it benefits consumers.
This year’s auction, known as auction round eight, is expected to continue as normal in the coming weeks.
Michael Shanks, the Energy Minister, told the House of Lords Environment Committee that the next auction was being put on hold so that the CfD programme could be reformed.
It follows concerns that the development of renewable power capacity is moving faster than work to upgrade the electricity grid.
This has resulted in network bottlenecks and vast amounts of power going to waste. It has also led to wind farms being paid hundreds of millions of pounds to switch off, a practice known as ‘curtailment’ in industry jargon.
Shanks told peers that the Government was drawing up a new plan to prevent too much future capacity being built in Scotland, which is behind the biggest bottlenecks. He said the way subsidies are awarded will also change.
“The CfD process has been incredibly useful to give investors certainty to build new projects,” Shanks said – but he added that “we do now want to pause” before the next auction round to “look at whether we need some more significant changes to the contracts for difference scheme to make sure they work for the consumers of the country”.
John Healey, the Chancellor, declared that Labour’s new priority was “first and foremost cheaper energy” in last week’s Budget.
Whitehall sources told the Telegraph that his remarks signalled a demotion of the 2030 clean power targets championed by Ed Miliband, the Foreign Secretary, when he ran the Department for Energy Security and Net Zero.
Dan Tomlinson, a Treasury Minister, said after the Budget that Burnham would pursue “a new energy pathway” to “bring energy costs down to help British business to compete and British households to cope”.
Pointing to the rising cost of wasted wind power, Tomlinson said: “With growing constraint and distribution costs, it’s right that the system costs of all new power are considered.”
He added that the UK would “only procure clean power” through auction round eight “if we are confident it will lower bills” and “we will reform the contract for difference [for the next auction] to support building the lowest cost system, fixing market distortions and siting assets in the right place”.
Ministers have also imposed a moratorium on new levies and policy costs being added to bills.
The Government insists that it stands by the 2030 clean power targets, which aim to ensure that 95% of electricity generated by the end of the decade comes from ‘clean’ sources such as renewables, nuclear or batteries.
However, Ministers have sought to downplay the commitment.
Worth reading in full.
