Concern over UK Energy Bill

Mike Weir MP, SNP spokesperson on Energy, has expressed concern at the lack of detail in the UK government’s Energy Bill which had its second reading recently. Mr Weir said that the new system must work for all renewables and must not be a hidden subsidy for nuclear.

Commenting on the bill Mr Weir said: “The most glaring omission from the bill is the absence of a target to decarbonise the electricity market by 2030. The lack of such a target is not only damaging to the environment but could impact upon investment in renewables as investors are unsure of what will happen beyond 2020.

“It is imperative that there is clarity that we are going to decarbonise the market and that investors and generators can bring forward projects with confidence. The Committee on Climate Change have reported that if the UK indulges in a fresh “dash for gas” average energy bills could rise over the next decades by £600, whilst investment in renewables would lead to a much smaller rise of around £100. Clearly the Scottish Government’s policy of clean green renewable energy is the most sensible way forward for the whole of the UK.”

Mr Weir also expressed concern over the structure of the proposed contracts for difference. He continued: “The Renewable Obligation certificate system has worked well and if we are going to adopt the new system it must be made clear that it works for all renewable technologies, and particularly those new technologies that require significant initial investment. We have yet to see much of the detail and the UK government must bring this forward urgently.

“There is real concern that the new system will be used to provide a hidden subsidy for nuclear to get round EU state aid rules. The key issue is the setting of the guaranteed or “strike” price for each form of energy. The initial price will be set administratively and subsequent prices by the market, but the initial price set will give a strong signal to the market. The UK government is already in negotiations with nuclear developers over the price and it is worrying that it is reported the strike price for nuclear will be higher even than that offshore wind.

“It is utterly ridiculous that an energy source that has been around for decades without ever fulfilling its claims should be given the highest guaranteed price.”