Investment in Renewables: Household Energy Bills

Business, Energy and Industrial Strategy – in the House of Commons on 29th March 2022.

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Photo of Karl McCartney Karl McCartney Conservative, Lincoln

What assessment he has made of the effect of trends in the level of investment in renewables on household energy bills.

Photo of Luke Evans Luke Evans Conservative, Bosworth

What assessment he has made of the effect of trends in the level of investment in renewables on household energy bills.

Photo of George Freeman George Freeman Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Achieving the UK’s ambitious net zero target to prevent global warming and climate emergency beyond 1.5° and protect consumers from global price volatility will require significant extra investment in renewable electricity generation. We have seen the cost of renewable technologies, most notably offshore wind, reduce fast and as more renewables are added to the system, household electricity bills will be less affected by fluctuations in volatile global gas prices.

Photo of Karl McCartney Karl McCartney Conservative, Lincoln

An effective way for household energy bills in Lincoln and across the UK to be cut by 25% right now is through the removal of the renewables surcharge on everyone’s bills, even temporarily. Have the Minister and his colleagues put that simple idea to their Treasury colleagues?

Photo of George Freeman George Freeman Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I can assure my hon. Friend that lots of ideas have been put to Treasury colleagues. The truth is that the falling cost of UK renewables, with offshore wind now down 60% through the contract for difference, is the best protection against global supply chain volatility. This country has led the way. In the past 30 years, we have grown the economy by 78% and reduced emissions by 44%. The Government focused on helping consumers, households and businesses with direct support and that is why the Chancellor announced £9 billion of relief in his February package, £5 billion last week, contrary to the claim from the Opposition that nothing was done, and extra funding for the warm home scheme and winter fuel levy.

Photo of Luke Evans Luke Evans Conservative, Bosworth

Constituents in Bosworth are concerned about three things: the cost of their energy bills, the environmental impact and the security of our energy supply. While being mindful of those three things, does my hon. Friend agree that a transition period is paramount while we deal with the fallout of a war, with rising energy prices and, of course, with meeting our net zero targets?

Photo of George Freeman George Freeman Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

My hon. Friend makes an important point that has not been picked up by the Opposition. We are emerging from a global pandemic and experiencing a war in Europe. Those are two unprecedented shocks to the global energy system. The Government have done everything necessary through the pandemic and we are doing it again on energy, but in the end we are in a global energy market and the best strategy, as my hon. Friend sets out, is the transition plan we have put in place, with strong support for renewables and help with the cost of energy in the short term for consumers, businesses and households.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Spokesperson (Armed Forces and Veterans), Shadow SNP Spokesperson (Education)

For Norway to feed energy into our national grid it costs £1.36 per MWh, for Belgium it is 77p per MWh, for France, 17p and for Germany, Luxembourg and The Netherlands it costs not a penny. Can the Minister explain how Scotland can exploit its renewable potential when it costs £7.36 per MWh to feed into the grid?

Photo of George Freeman George Freeman Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I am delighted to explain how Scotland can benefit from our renewables programme: the North sea transition deal, the net zero hydrogen fund, the industrial energy transformation fund, £20 million ringfenced for Scottish tidal, £40 million for carbon capture and storage, and £27 million for the Aberdeen energy transition zone. Frankly, we need fewer complaints from the Scottish nationalists and more support for the Scottish energy sector.

Photo of Kerry McCarthy Kerry McCarthy Labour, Bristol East

It is a little disappointing that the Minister could not just give a straightforward no to the question from Karl McCartney. Moving on, however, there are more than 600 wind and solar projects in the UK that already have planning permission. Will the Government admit they made a mistake in stopping the development of onshore wind, and fast-track those projects? They already have planning permission and are ready to go ahead. They are the answer to meeting our energy needs in the future.

Photo of George Freeman George Freeman Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The evidence suggests that the UK is the fastest economy in the G7 in deploying renewables. Offshore wind costs have fallen by 60%. Of course, everyone can do more, but I do not accept the criticism that we have not been in the vanguard; we have been, and we are, and offshore wind and solar have been fundamental to reducing the cost of renewables. That is the best support against rising energy prices.