John Healey has said he will veto new offshore wind projects if they will not lower bills, adding to concerns that the government is moving away from the pro-renewables agenda.
Announcing his plans, the chancellor said clean power is “how we break the grip of international gas prices on our bills”, but added the shift towards it “has to come at the right pace, in the right places, with the grid to carry it”.
New offshore wind projects lodging bids for subsidy contracts will only get signed off by ministers if they believe that all the power generated could be accommodated by Britain’s electricity grid without pushing up costs for consumers.
Writing in the Times, he said: “There’s no sense building power that can’t connect and then paying to switch it off. We will take that approach into our next renewables auction, only buying projects that can lower bills while strengthening our energy security.”
The move appears to be a further shift away from Labour’s target of having clean power by 2030, after Healey revealed more than £3bn worth of cuts to the energy department’s budget in the budget, much of which will pay for higher defence spending.
The cuts caused alarm among renewables experts, who warned they meant that Britain was unlikely to hit its targets on green heating, and were seen as a dismantling of former energy secretary Ed Miliband’s green agenda.
There is concern in government that wasted wind charges could add to energy bills, with the National Energy System Operator (Neso), which is funded through energy bills, being forced to pay wind turbines to switch off when there is not sufficient cabling capacity to transmit their power to consumers.
A National Audit Office report in September warned that homes and businesses could be faced with a potential annual bill of £7.8bn by 2030 to deal with the issue.
Healey appeared to preemptively address criticism of the plans. He said: “This is not a retreat from clean power. It is the credible route to it. Cheaper electricity will make it easier for businesses and households to electrify, strengthening our energy security and helping us decarbonise the wider economy.”
He added that “without the renewable generation added in recent years”, this year’s gas price shock “would have hit families and firms even harder.
“Those who want to rip up renewables would leave Britain more exposed to volatile markets and the dictators who exploit them.”
One casualty of the cuts announced in the budget was a reduction in the amount of money available for the government’s scheme to subsidise heat pumps, leading to warnings that clean heating ambitions were being undermined.
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Under the scheme, a typical household can claim £7,500 towards a heat pump, with about 60,000 a year being fitted in existing homes. The government has a target to raise that to 250,000 a year by 2030, and was planning to increase the scheme’s funding from £400m this year to just over £700m by 2029-30.
Some believe the cuts, much of which will pay for higher defence spending, are evidence of a broader shift away from the pro-renewables agenda pushed by Miliband and his successor, Miatta Fahnbulleh. Allies of Miliband and Fahnbulleh insisted the government’s green agenda remained as strong as ever, pointing out that Healey also announced a long-term move to shift green costs away from bills and on to taxpayers – something the two energy secretaries have both championed.
Healey announced on Wednesday that the government would fund the defence investment plan in part through cuts to other departments.
Much of that will come from the energy department, including £741m from the boiler upgrade scheme, the government’s plan to incentivise people to replace their gas boilers with electric heat pumps.
