To ask His Majesty's Government whether it remains the policy of the National Energy System Operator to achieve clean electricity by 2030 and, if so, what is the effect on the UK's energy security.

To ask His Majesty's Government whether it remains the policy of the National Energy System Operator to achieve clean electricity by 2030 and, if so, what is the effect on the UK's energy security.

To ask His Majesty's Government when they expect to break the link between electricity bills and volatile international gas prices.

To ask His Majesty's Government when they expect to break the link between electricity bills and volatile international gas prices.

Lords question for short debate on what assessment they have made of why UK electricity prices are among the highest in the Organisation for Economic Co-operation and Development.

Lords question for short debate on what assessment they have made of why UK electricity prices are among the highest in the Organisation for Economic Co-operation and Development.

To ask His Majesty's Government what percentage of the UK's electricity is imported via interconnectors from European countries; and what percentage of electricity in each of those countries is produced from the burning of coal, oil or gas.

To ask His Majesty's Government what percentage of the UK's electricity is imported via interconnectors from European countries; and what percentage of electricity in each of those countries is produced from the burning of coal, oil or gas.

To ask His Majesty's Government what percentage of the UK's electricity is imported via interconnectors from European countries; and what percentage of electricity in each of those countries is produced from the burning of coal, oil or gas.

To ask His Majesty's Government what percentage of the UK's electricity is imported via interconnectors from European countries; and what percentage of electricity in each of those countries is produced from the burning of coal, oil or gas.

To ask His Majesty's Government whether the decoupling of the wholesale price of gas and the price of electricity applies to the Northern Ireland electricity market as well as the market in Great Britain.

To ask His Majesty's Government whether the decoupling of the wholesale price of gas and the price of electricity applies to the Northern Ireland electricity market as well as the market in Great Britain.

To ask His Majesty's Government what estimate they have made of the amount that will be spent on Chinese products to decarbonise the supply of electricity by 2030.

To ask His Majesty's Government what estimate they have made of the amount that will be spent on Chinese products to decarbonise the supply of electricity by 2030.

To ask His Majesty's Government what estimate they have made of the tonnage of (1) steel, (2) copper, and (3) cement, that will be required to decarbonise the supply of electricity by 2030.

To ask His Majesty's Government what estimate they have made of the tonnage of (1) steel, (2) copper, and (3) cement, that will be required to decarbonise the supply of electricity by 2030.

To ask His Majesty's Government whether they have made an estimate of the number of engineers required to decarbonise the supply of electricity by 2030.

To ask His Majesty's Government whether they have made an estimate of the number of engineers required to decarbonise the supply of electricity by 2030.

To ask His Majesty's Government what is the average price per kilowatt-hour of retail electricity generated by (1) wind power and (2) gas.

To ask His Majesty's Government what is the average price per kilowatt-hour of retail electricity generated by (1) wind power and (2) gas.

Lords question for short debate on what assessment they have made of the impact of the Clean Power 2030 Action Plan upon rural communities.

Lords question for short debate on what assessment they have made of the impact of the Clean Power 2030 Action Plan upon rural communities.

Delivering lower bills and a secure energy supply for working families and businesses is at the heart of the Government’s sprint toward homegrown clean energy. Marginal cost pricing has historically incentivised the cheapest forms of energy to provide as much power as possible. That worked well when the competition was between fossil fuel producers, but less well when there are many cheaper bids from renewable sources for power supply but still the price can be set by more expensive and volatile gas. Accelerating the development of renewable generation, as we are now through clean power 2030, will progressively reduce to a residuum the amount of time that gas sets the price.

Delivering lower bills and a secure energy supply for working families and businesses is at the heart of the Government’s sprint toward homegrown clean energy. Marginal cost pricing has historically incentivised the cheapest forms of energy to provide as much power as possible. That worked well when the competition was between fossil fuel producers, but less well when there are many cheaper bids from renewable sources for power supply but still the price can be set by more expensive and volatile gas. Accelerating the development of renewable generation, as we are now through clean power 2030, will progressively reduce to a residuum the amount of time that gas sets the price.

My noble friend is absolutely right. Although gas accounts for only 30% or so of the market, at the moment it sets the price over 60% of the time with marginal cost pricing arrangements. It is right that we need to go faster and further. Indeed, today the Government have announced plans, among many other things, to ensure that the element of the renewable input into the system—on renewables obligations rather than fixed-price contracts for difference—can be moved over to that latter category as soon as possible, thereby bearing down on the amount of time that gas sets the price in the market.

My noble friend is absolutely right. Although gas accounts for only 30% or so of the market, at the moment it sets the price over 60% of the time with marginal cost pricing arrangements. It is right that we need to go faster and further. Indeed, today the Government have announced plans, among many other things, to ensure that the element of the renewable input into the system—on renewables obligations rather than fixed-price contracts for difference—can be moved over to that latter category as soon as possible, thereby bearing down on the amount of time that gas sets the price in the market.

The Government are looking actively at many different ways of going further and faster as far as the green energy revolution is concerned. Indeed, they are actively looking at the Greenpeace and Stonehaven report on not only delinking but strategic reserves for gas in future. My personal view is that what they are proposing is a little early in the cycle but, nevertheless, could be an important element later on, in how the system stabilises itself once it is mainly renewables and low carbon.

The Government are looking actively at many different ways of going further and faster as far as the green energy revolution is concerned. Indeed, they are actively looking at the Greenpeace and Stonehaven report on not only delinking but strategic reserves for gas in future. My personal view is that what they are proposing is a little early in the cycle but, nevertheless, could be an important element later on, in how the system stabilises itself once it is mainly renewables and low carbon.

Imposing an extra windfall tax, on those elements of the system that are within the renewables orbit but outside the CfD arrangements, takes away the excess profits that those elements make as a result of being aligned with gas in charging those volatile prices. So it is a very sensible thing to do, to make sure that excess profits are not taken from consumers but instead reside with them as lower prices.

Imposing an extra windfall tax, on those elements of the system that are within the renewables orbit but outside the CfD arrangements, takes away the excess profits that those elements make as a result of being aligned with gas in charging those volatile prices. So it is a very sensible thing to do, to make sure that excess profits are not taken from consumers but instead reside with them as lower prices.

The effect of the windfall tax is, essentially, to start returning some of those excessive bill contributions back to bill payers so that their overall bills are less than they otherwise would be.

The effect of the windfall tax is, essentially, to start returning some of those excessive bill contributions back to bill payers so that their overall bills are less than they otherwise would be.

The reference that the noble Baroness makes to Denmark is an interesting one, inasmuch as the Danish system is wholly integrated between renewables, heat and power of different kinds—particularly district heating and various such things, which can be used in conjunction with other forms of energy to provide a balanced overall system. It is true that Denmark continues to produce oil and gas but also that Denmark is, along with the UK, looking at methods of making sure that relates to production for the future rather than exploration.

The reference that the noble Baroness makes to Denmark is an interesting one, inasmuch as the Danish system is wholly integrated between renewables, heat and power of different kinds—particularly district heating and various such things, which can be used in conjunction with other forms of energy to provide a balanced overall system. It is true that Denmark continues to produce oil and gas but also that Denmark is, along with the UK, looking at methods of making sure that relates to production for the future rather than exploration.

I thank my noble friend for that question, because he has, remarkably, just anticipated the development of the strategic spatial energy plan and a reformed national pricing delivery plan, both of which came out this morning. Both plans address exactly the longer-term balance arrangements as far as electricity is concerned, particularly how prices can be the lowest possible for the deployment of electricity and gas resources across the country.

I thank my noble friend for that question, because he has, remarkably, just anticipated the development of the strategic spatial energy plan and a reformed national pricing delivery plan, both of which came out this morning. Both plans address exactly the longer-term balance arrangements as far as electricity is concerned, particularly how prices can be the lowest possible for the deployment of electricity and gas resources across the country.

I thank the noble Lord for that question. I cannot stand here and guarantee that that move will be brought forward by one year, as he suggests. It is a very sound idea. The future homes standard, which is now in place, is instead of the net-zero low-carbon standards that should have been implemented about 15 years ago, if the previous Government had not thrown them out. We are catching back up, as far as possible, and making sure we can get that done in good order.

I thank the noble Lord for that question. I cannot stand here and guarantee that that move will be brought forward by one year, as he suggests. It is a very sound idea. The future homes standard, which is now in place, is instead of the net-zero low-carbon standards that should have been implemented about 15 years ago, if the previous Government had not thrown them out. We are catching back up, as far as possible, and making sure we can get that done in good order.

Of course, the Government have addressed those costs, particularly in the recent move to take elements of the levies away from levy arrangements and into the general Exchequer. That is part of the £150 off energy bills that the Government have recently reported. The noble Lord is absolutely right about the effect of levies on prices, but I hope he will also accept that that is exactly what the Government are doing at the moment: bringing prices down for the consumer by transferring how those levies work for the future.

Of course, the Government have addressed those costs, particularly in the recent move to take elements of the levies away from levy arrangements and into the general Exchequer. That is part of the £150 off energy bills that the Government have recently reported. The noble Lord is absolutely right about the effect of levies on prices, but I hope he will also accept that that is exactly what the Government are doing at the moment: bringing prices down for the consumer by transferring how those levies work for the future.