Claire Coutinho (Conservative)

Last year, volatile global gas prices drove electricity prices to record highs many times greater than the administrative strike prices set out today. This led to the Government stepping in and paying around half of people’s energy bills last year. It also saw renewable generation paying back hundreds of millions into the contracts for difference, reducing the amount needed to deliver our energy support schemes. Going forward, we agree with the Climate Change Committee that oil and gas will remain an important part of our overall energy mix when we reach net zero by 2050. However, our reliance on gas for electricity production today risks making power prices higher than they would be in a system with a greater share of generation from wind and solar. We must therefore continue to reduce our reliance on gas for electricity production in a way that maintains energy security. Moving to home-based, clean power mitigates risks to bill payers, now and in the future.

Driving our renewable energy manufacturing industry

The contracts for difference scheme has been successful in driving down the price of renewable energy deployment, but this has presented challenges for sustainable renewable energy supply chains in competing for business, particularly as they have been struggling under difficult market conditions since the covid-19 pandemic and Russia’s invasion of Ukraine. I am therefore also publishing a consultation today on the introduction of new sustainable industry rewards into the allocation round from 2025, which will provide additional funding through the contracts for difference to support projects that invest in more sustainable supply chains.

The core parameters published today demonstrate we are investing in our booming renewables sector. We are backing our world-leading offshore wind sector, delivering enough offshore wind to power the equivalent of every home in Britain by 2030. I am committed to a successful allocation round 6, which drives value for money for consumers. This will also be important in helping achieve energy security, decarbonising our power system by 2035, and hitting our net zero targets by 2050.

[Source]