Householders will see their energy bills rise following the UK Government’s decision to award £175 million in public subsidies to support diesel generators.
Energy Secretary Amber Rudd made the announcement while speaking during energy questions in the House of Commons, blaming the Labour Party for the hike.
It follows the results of DECC’s second Capacity Market auction which was revealed last month.
When questioned by Shadow Energy Secretary Lisa Nandy MP, Ms Rudd insisted subsidising the highly polluting energy source is to ensure the UK “doesn’t have any problem at all with energy security”.
She said: “What is astonishing is the Honourable Lady’s lack of understanding of the fact that the Capacity Market is needed because of Labour’s woeful underinvestment in infrastructure under their government.
“We are left with the consequences of making sure that energy security is completely reliable. The Capacity Market is essential to ensure that hole is filled and we are proud of the way it has delivered the second auction just completed. As I said to the Honourable Lady, it is a few pounds, it will be under £10 and we will ensure that energy security is never going to be a question under this government.”
Ms Rudd also did not deny when questioned if companies will make returns of more than 20% at the expense of bill payers.
The news attracted various responses on social media.
Renewable energy and carbon targets
The Energy Secretary said the UK is currently considering the implications of the Paris outcome domestically and with EU partners.
She insisted renewable energy is an “essential part” of energy security as well as decarbonising and meeting the targets and that government isn’t undermining the policies.
“What we are trying to do is get the right balance to support policies, support renewable energy while also looking after the bill payer and ensuring that not too much is added to their bills… The UK is responsible for 1% of the world’s emissions and the success of Paris was that we deal with nearly 100% of the world emissions. That is where we will get the real difference in change in terms of carbon emissions,” Ms Rudd said.
When questioned about climate change not being mentioned in the remit of the National Infrastructure Commission by Green MP Caroline Lucas, she added: “The National Infrastructure will shortly be consulting on which projects to prioritise but I can say that the projects they have already said they are going to be looking at in our sector which is interconnectors and system operations will be important for delivering on our decarbonising future.”
On carbon capture and storage (CCS), the Energy Secretary said the technology won’t be ruled out in the future.
It comes as the government scrapped the £1 billion CCS competition last month.
Ms Rudd defended the decision: “This government has made substantial investments through our Entrepreneurial Fund in early start CCS. We have industrialised CCS projects working, operating and testing in Teesside. The fact is the decision was made not to have a £1 billion investment. It was a difficult decision made in a difficult Spending Round but we recognise CCS will still have an important future in a low carbon economy.”
She believes CCS as well as small modular nuclear reactors will benefit from investment through the Entrepreneurial Fund going forward.