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Contracts for Difference
03 September 2024
Lead MP
Ed Miliband
Debate Type
Ministerial Statement
Tags
Climate
Other Contributors: 25
At a Glance
Ed Miliband raised concerns about contracts for difference in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
I congratulate the new Deputy Speaker and proceed to make a statement regarding the sixth contracts for difference allocation round, highlighting the failure of the previous government's energy policy which led to high energy bills. The current mandate is to ensure Britain’s energy security through home-grown clean power. Last year's auction under the previous regime was unsuccessful with no offshore wind projects awarded; however, this year's auction has been expanded by 50%, securing a record-breaking 131 new clean energy projects across solar (93 photovoltaic projects unlocking 3.3 GW), onshore wind (almost 1 GW), and floating offshore wind (400 MW at less cost than before). The total secured is nearly 10 GW, sufficient to power over 11 million homes. These achievements demonstrate Britain's shift towards becoming a clean energy superpower, reducing dependency on volatile global gas markets, and offering job opportunities throughout the UK.
Richard Tice
Con
Ilford South
Question
Sir, the Secretary of State said he has secured a floating offshore wind farm at an impressive price. But that is double the cost of last year’s successful tender for the same project.
Minister reply
The minister confirms that despite the higher price compared to last year's tender due to inflation and strike price adjustments, these projects represent significant advancements in technology and energy capacity.
Mark Garnier
Con
Wyre Forest
Question
The MP welcomed AR6 but questioned its impact on energy bills, job losses in the oil and gas sector, environmental protections, grid infrastructure support, and the ambition of decarbonising the grid by 2030. He also raised concerns about GB Energy's financial burden.
Minister reply
Ed Miliband acknowledged the previous government's positive contributions but highlighted their missteps regarding renewable energy policy. He stated that international gas markets are driving up bills, and while they support an orderly transition in North Sea oil fields with a just transition for workers, he emphasised the need to move away from fossil fuels. The minister also pointed out that other countries have higher renewable jobs per capita and defended GB Energy as necessary for job creation within the UK.
Toby Perkins
Lab
Chesterfield
Question
The MP congratulated the Minister on his enthusiasm and sought assurance of a consistent plan to support long-term business investments in clean energy.
Minister reply
Ed Miliband responded positively, emphasising the partnership between government and private industry. He noted that much of the investment will come from the private sector but also stressed the role of catalytic public investment to break down barriers for planning and grid infrastructure, as well as a commitment to involve every business interested in clean energy.
Wera Hobhouse
Lib Dem
Bath
Question
We Liberal Democrats welcome the results of this round, which show that the CfD programme is back on track. The previous Conservative Government failed with zero bids from onshore wind developers in the last year. We must harness Britain’s natural resources and increase our energy independence. Future allocation rounds must continue to deliver increasing quantities of renewables by setting ambitious budgets and bringing forward incremental reforms of the CfD regime. Can the Secretary of State assure me that this round is not just a one-off and that we will increase the pace of the CfD allocation rounds?
Minister reply
I thank the hon. Lady for her support and agree that we face big challenges to get moving on offshore wind, onshore wind, solar rooftops, and ground-mounted solar. The truth is that the auction has served us well and continues to do so. We increased the budget substantially to make sure this round was a success. I am interested in working with industry to ensure future rounds are successful and provide industrial certainty for planning ahead.
Melanie Onn
Lab
Great Grimsby and Cleethorpes
Question
The Secretary of State is right to point out that the previous Government presided over a failed fifth auction round for offshore wind. This success means good jobs for coastal communities such as mine, but what action will he take to make sure those communities see the benefits?
Minister reply
My hon. Friend speaks with great experience and I welcome her expertise. We need to face up to the global race for these jobs and are committed to re-industrialisation through measures including Great British Energy, the national wealth fund, and the British jobs bonus.
Andrew Murrison
Con
South West Wiltshire
Question
What consideration has the Secretary of State given to proposals for an interconnector from North Africa to the UK, bringing reliable solar and wind power at times when there is no wind or sun here?
Minister reply
I am aware of the Xlinks proposal and we need to look at all proposals that maximise energy security. We need every source of power available, including nuclear, onshore wind, offshore wind, solar, tidal, carbon capture and storage.
Bill Esterson
Lab
Sefton Central
Question
My right hon. Friend is correct that clean energy is the cheapest way to power the UK, but there will be intense international competition for investment. How does he foresee ensuring we have a competitive advantage in attracting that investment for years to come?
Minister reply
Part of it is about having a Government committed to a proper industrial strategy and having levers to make it happen. We look at the Inflation Reduction Act as offering real lessons on how to leverage private investment, although not on their scale. Our interventions can still make a difference.
Richard Tice
Reform
Boston and Skegness
Question
The Secretary of State’s obsession with renewable energy ignores the fact that offshore wind turbine bids are 20% above current prices, floating offshore wind bids three times higher, requiring subsidies of £1.5 billion a year. Why will he not be honest and tell the truth: that renewable energy is more expensive, not cheaper?
Minister reply
I am interested in his intervention, but the cost of living crisis was caused by exposure to fossil fuels, which are sold on international markets leading to high bills for British people. The only way off this rollercoaster and taking back control is becoming a clean energy superpower.
Joani Reid
Lab
East Kilbride and Strathaven
Question
This allocation round is testament to the continued success of the contracts for difference scheme, but as we are on course to produce more renewable energy than ever, we need political and financial commitment to develop transmission infrastructure as well.
Minister reply
We face a crisis with our grid situation because people want to connect to cheap clean renewables but are offered dates in the 2030s. Grid reform and planning reform is crucial for tackling fuel poverty and lowering energy bills.
Dave Doogan
SNP
Angus and Perthshire Glens
Question
5.3 GW of offshore wind is a great achievement, especially compared to the Tories’ flat zero in auction round 05. It unlocks vital projects off my constituency’s coast and supports jobs. Will he tell us where the rest of that onshore energy is coming from? How will he achieve his target of 60 GW by 2030?
Minister reply
The only way this works is if we work with Governments across the UK, whatever kind it is. We have had many conversations with Gillian Martin, the Cabinet Secretary in Scotland. The deliberate example of ‘country first, party second’ has been set by the Prime Minister.
Florence Eshalomi
Lab Co-op
Vauxhall and Camberwell Green
Question
It is a pleasure to welcome my right hon. Friend to his place, and to see him continuing to champion this really important change which our constituents up and down the country have been crying out for. Does he agree that we need to get on with this as quickly as possible?
Minister reply
My hon. Friend is 100% right, it is hard for Governments of all stripes to admit this truth but when international prices are set these matters are not within our control. The answer has to be going as fast as possible to get energy security and lower bills.
Julian Lewis
Con
New Forest East
Question
Congratulates the Secretary of State on his appointment and raises concerns about Chinese exploitation of Uyghur slave labour in solar panel manufacturing. Asks how the Government plans to address this issue.
Minister reply
Thanks Julian for his kind words, acknowledges the serious nature of the issue, states that controls were already in place from previous governments and are being reviewed as part of a solar taskforce.
Perran Moon
Lab
Camborne and Redruth
Question
Thanks the Secretary of State for his statement and expresses Cornwall's readiness to contribute to renewable energy. Asks about plans to support smaller, cooperative community energy projects.
Minister reply
Welcomes the question and promotes upcoming Second Reading of the Great British Energy Bill which includes £3 billion allocation for local power plan involving councils and communities.
Alistair Carmichael
Lib Dem
Orkney and Shetland
Question
Asks if the Secretary of State will set a 1 GW deployment target for tidal stream energy development.
Minister reply
Acknowledges that tidal remains relatively expensive but supports the idea that many technologies become cheaper at scale. Promises to continue important discussions.
Olivia Blake
Lab
Sheffield Hallam
Question
Congratulates the Secretary of State and argues against Conservative opposition to renewables as a block to success.
Minister reply
Agrees that debates in the House about fuel poverty connect with decisions made locally. Emphasises the need for building solar, onshore wind, and grid infrastructure.
James Wild
Con
North West Norfolk
Question
Points out rising energy bills despite promises of reductions.
Minister reply
Explains that price cap increase is due to reliance on international gas markets and argues for clean energy investment as the way forward.
Tracy Gilbert
Lab
Edinburgh North and Leith
Question
Asks about speeding up consent process for Berwick Bank wind farm.
Minister reply
Commits to working with Scottish Government to ensure planning system is fit for purpose.
Lee Anderson
Reform
Ashfield
Question
Critiques the Secretary of State's focus on renewables and asks about discounts on fuel bills.
Minister reply
Argues that reliance on fossil fuels does not give energy security and invites support for publicly owned energy system.
Oliver Ryan
Ind
Burnley
Question
Welcomes achievement of the Secretary of State towards clean power by 2030. Asks if home-grown clean power will protect bills from price shocks.
Minister reply
Agrees that exposure to fossil fuels does not provide security and invites support for the Great British Energy Bill.
Claire Young
Lib Dem
Thornbury and Yate
Question
Thanks the Secretary of State and asks about steps being taken to accelerate roll-out of new storage solutions, including green hydrogen.
Minister reply
Acknowledges importance of dispatchable power and energy storage, mentions ongoing work on long-duration energy storage.
Polly Billington
Lab
East Thanet
Question
Asks why the Conservatives oppose publicly owned clean power company despite foreign ownership being acceptable.
Minister reply
Argues for public ownership of energy in Britain, highlighting benefits to taxpayers and job creation.
Shaun Davies
Lab
Telford
Question
The Secretary of State will know from his recent visit to Telford that businesses right across the country, including in my constituency, want to partner with the Government on this agenda. Will this statement and future announcements mean that those private sector businesses, which want to put their skills and money into this agenda, and take risks on behalf of the Government and the country to make us a clean energy superpower, have the Secretary of State’s backing?
Minister reply
My hon. Friend is absolutely right. I very much enjoyed my visit to Telford, where I spoke with local business. It is easy to think about these things in very macro terms, of how many gigawatts and so on—the kind of thing I like talking about—but he is right that this is as much, if not more, about all the jobs that we can create in the supply chain. People in this country want hope and change, and this will deliver it.
Luke Charters
Lab
York Outer
Question
I welcome the auction increasing solar capacity. There are great projects in my constituency, funded via that scheme, such as Hessay solar. Will the Secretary of State visit sunny York to see the site once it is complete, and does he share my conviction that solar will be critical in the energy mix if we are to reduce our dependence on foreign oil and gas?
Minister reply
I very much welcome my hon. Friend’s embrace of solar as part of the energy mix. It is really important to say this: we need more rooftop solar. Lots of people in this House ask, “Why don’t we do more on rooftops?”, and I agree with them. There is also an important role for ground-mounted solar, however. I very much look forward to coming to York at some point to see the projects he talks about.
Henry Tufnell
Lab
Mid and South Pembrokeshire
Question
I welcome my right hon. Friend’s statement, for which I thank him. It is incredibly exciting and marks a complete change from Conservative party policy. The Celtic sea, off the coast of my constituency, has the unique conditions of deep water and strong winds, offering us the opportunity to be a global leader in the new technologies of floating offshore wind. However, those unique conditions require a unique approach from Government. As we look forward to allocation round 7, will the Secretary of State join me in working to refresh the approach in the auction so that more support goes towards FLOW projects in autumn 2025?
Minister reply
My hon. Friend is a great champion of floating wind in the Celtic sea. He is right: we are proud of the 400 MW project in this round. We need to look—including in the auction round, through GB Energy and in other ways—at how we can build on our advantages in crucial floating wind technology, take the opportunities that they provide, and have the industrial capacity. I look forward to discussions with him and other colleagues on how we make that happen.
Shadow Comment
Mark Garnier
Shadow Comment
The shadow secretary welcomes the success of the contracts for difference allocation round but criticises the government's approach to funding renewables through Great British Energy and its impact on energy bills. He points out that while renewable production increases, UK gas production is decreasing, leading to reliability concerns. The opposition acknowledges the importance of investing in clean energy but questions the necessity of the debt-funded GB Energy project and expresses doubt about the promised £300 reduction in energy bills. Furthermore, he raises concerns over job losses due to restrictions on new oil and gas development and the localization of jobs created by these initiatives. Garnier also addresses potential environmental impacts such as green belt development and grid infrastructure challenges while questioning the feasibility of decarbonizing the grid by 2030.
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