UK Energy Sources and Cost of Energy

Baroness Hayman Excerpts

Thursday 19th March 2026 Lords Chamber

[Lord Whitehead (Lab)]

No, the Energy Secretary does not wish to see drilling for North Sea oil banned. What he is doing, as the noble Lord will know, is developing transitional energy certificates, which will enable tie-backs to take place in existing fields. The noble Lord will know that the existing structure of the North Sea fields largely consists of fields that have not been tapped—small fields that are adjacent to additional fields—and so the tie-back arrangement will ensure both production and drilling for those tie-back fields in association with the existing fields.

[Baroness Hayman (CB)]

My Lords, I declare my interest as a director of Peers for the Planet. Given what the Minister said about this being, in essence, a price security issue, what progress have the Government made on the issue of decoupling the price of other forms of generation from the price of gas? As we know, that is hugely volatile and has an enormous impact on both domestic and industrial consumers.

[Lord Whitehead (Lab)]

The noble Baroness is exactly right. As she will know, part of the price increases that are being suffered at the moment go into the market-making price of gas that secures the general price of electricity, for example, in our markets by marginal cost pricing. Certainly, the renewed and continuing volatility in international markets is likely to be a substantial driver of high price levels and price increases in the future. Therefore, the Government are actively looking at measures that could decouple the UK energy market, where it is green and low carbon, from that marginal cost pricing arrangement, which is still driven by gas in about 65% of settlements at the moment. That will be part of the UK’s drive for clean energy sources for the future.