18:00 The Minister for Energy and Clean Growth (Claire Perry)

The RO scheme has been highly successful in bringing forward renewable energy, and 25,000 stations across the UK now generate more than 65 TWh of renewable electricity a year, which is equivalent to about 22% of the UK electricity supply market. As to its contribution to decarbonisation, more than 28 million tonnes of carbon dioxide emissions were avoided in 2016-17 alone. However, we must of course keep energy bills as low as possible for consumers while we go through the transition, and since 2015 steps have been taken to control costs; but we need to do more.

It is our view that both co-firing and conversion stations have an important transitional role to play in decarbonising the grid, and they can generate at high levels more or less continuously. However, stations already accredited under the scheme can increase the amount of biomass they use quickly and without notification to Ofgem, which can, of course, significantly increase support costs. The Government acted in 2014 to discourage that deployment of new generating capacity by removing grandfathering rights for certain sorts of co-firing and biomass conversion generating stations. However, despite those changes, last year evidence suggested that there was significant unforecast generation, which is something we are keen to avoid. Indeed, we think that if we were not to intervene now, there would be an increase in bills of £2 per year per household. For business users, and particularly those with low electricity consumption, there would be increases of up to £140 per year, whereas the bills of energy-intensive industries would increase by up to £53,000 per year.

The order also makes some technical changes that are unconnected to biomass conversion and co-firing. For example, we are bringing certain combined heat and power stations into line with the existing requirements for other stations, and are requiring a declaration that double subsidies will not be claimed under other schemes. The order clarifies that existing greenhouse gas trajectories in the Renewables Obligation Order 2015 apply equally to electricity-only dedicated biomass power stations and biomass power stations with combined heat and power. The order will also clean up various typos, which do not have a material effect on the legislation.

The Government are committed to keeping energy bills as low as possible for consumers, while cutting greenhouse gas emissions and supporting economic growth. The cap mechanisms implemented through the order take into account feedback from stakeholders. They balance the interests of generators and consumers. The flexibility provided by this approach will allow units to generate more when electricity demand is highest. I commend the order to the Committee.

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