UK Electricity Prices

Lord Moynihan of Chelsea Excerpts

Thursday 4th June 2026 Grand Committee

[Lord Moynihan of Chelsea (Con)]

My Lords, it is a great pleasure to follow such an excellent speech by the noble Lord, Lord Griffiths. I declare my interest in new nuclear technology in the United States.

We have the highest electricity price in the world. Why? The Secretary of State claims that this is solely due to the gas price. The gas price does affect prices, but why and to what degree? Certainly, if the price of gas goes up, the electricity price goes up. But when the gas price goes down, will the cost go down? The devil in electricity prices is intermittent renewables. They are the cause, not just of high electricity prices, but of high prices that will persist in this country for almost the next two decades. While other countries will see their electricity price going lower and lower, we will be left high and dry.

Why is that the case? First, the old renewables contracts ensured not just very healthy profits for the operators but a huge extra and entirely unnecessary bonus when gas prices went up. It is another example of blundering negotiation by a zealous Civil Service under—I do agree—a Government run by my own party, which resulted in the Government being absolutely trounced by far better negotiators to achieve that wonderful upside benefit for the operators. That blunder was finally spotted, and now we have new contracts where the renewables operator does not get anything extra if gas prices go up. That means that, with these new contracts, it is just not true, as Miliband claims, that the gas price rules. Whatever the price of gas, what we pay for that large source is impervious. Note that the only way the Government managed to make even that happen—again in their blundering negotiations—was a very high price guarantee in the first place with very long contracts. The problem will persist, literally for a decade and a half or two, regardless of the cost of gas. Why were these very rich deals seen as necessary? I do not believe they were, but they were seen as necessary. It is because intermittent technologies are medieval.

What are we to do? If we let people drill for gas in the North Sea and by fracking—and the same all over the world—then the supply of gas will inevitably rise to the marginal cost of production, and the cost of gas will lower, say, to what it is currently in the United States, which is a tiny fraction of what we pay here. We are told by the Secretary of State that the price of gas rules our price of electricity, so, when the gas price starts to decline, will the price of electricity go down? No, it will remain high for 15 or 20 years, because there is this enormous renewable subsidy forcing up the price of electricity for contracts going on into the 2040s. For industrial competitiveness, this is dreadful, as everybody else’s price goes down and our does not. This is the disaster that will go on disastering.

In the US, the moment Trump got in last year, he slashed a bunch of useless regulations in nuclear. Within a year, the US has over a dozen safer and cheaper new nuclear plants and technologies being built. Within 15 to 20 years, America will be dominating those technologies while we flounder.

We should stop intermittent renewable contracts now, slash regulation on nuclear—the type that requires a nuclear power station to have less radiation in it than you get by walking down the road—and use our great scientific know-how to become leading in nuclear. Yet, only once we have got through the next awful two decades that face us, with all these intermittent high-cost renewable contracts, will we once again be able to have cheap electricity.