Labour to pause renewables auctions and review subsidy scheme

Summarised from 2 outlets · Updated 4 Nov, 11:21 · Archive

Labour is pausing renewables auctions to review whether its contracts for difference subsidy scheme is delivering value for consumers.

Labour has paused the next round of green power auctions after reviewing whether its renewables support scheme represents good value. Energy Minister Michael Shanks told the Lords' Environment and Climate Change Committee that the contracts for difference (CfD) system would be examined ahead of the 2027 round of auctions.

Under the CfD scheme, renewables generators bid to receive an agreed rate for the power they produce. If the wholesale price rises above that rate, generators pay back the difference. If it falls below, they receive a subsidy from consumer bills to make up the shortfall.

Chancellor John Healey said the Government's priority was 'first and foremost cheaper energy' and that new offshore wind projects would need to demonstrate they would lower bills to be approved. Mr Shanks said the Government was seeking a more 'coherent' approach to the energy system. The issue of curtailment, where wind farms are paid not to generate because the grid cannot carry power to where it is needed, has come under scrutiny.

How it is being reported

• Labour shelves Net Zero contract auctions that subsidise solar and wind projects after finally admitting they might not be good value for moneyEnergy Minister Michael Shanks told peers the contracts for difference (CfD) system would be examined to see if it was working for consumers ahead of the 2027 round.Daily Mail · 4 Nov, 11:00
• Labour consider major shake-up of renewables scheme amid fears over rising energy costsLabour is considering "significant changes" to its flagship renewables support scheme, the House of Lords was told. The Lords' Environment and Climate Change Committee heard there would be a pause before a future auction for renewable generation, to make sure 'contracts for difference' payments "work for the consumers of the country". Giving evidence to the committee, Energy Minister Michael Shanks said the Government was seeking a more 'coherent' approach to the energy system. The issue of curtailment – where wind farms are paid not to generate because the grid is unable to carry power to…GB News · 3 Nov, 21:46

In this story: Labour · Michael Shanks · John Healey · House of Lords

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