Offshore Wind

Lord Moynihan Excerpts

Monday 19th January 2026 Lords Chamber

Let me close by saying that Britain faces a choice over the coming years. We can seize the opportunities of clean, homegrown energy to cut bills and create jobs, or we can double down on our exposure to fossil fuels. In calling for us to cancel this auction, our opponents made their choice: they are setting their face against cheaper, clean, homegrown power; against 7,000 jobs supported today and thousands more to come; against taking back control of our energy sovereignty; and against action on the climate crisis to protect our children and grandchildren. This Government have made our choice: we choose energy security, lower bills, good jobs, and the climate. I commend this Statement to the House”.

[Lord Moynihan (Con)]

My Lords, I declare my interests. I am chair of Amey UK Ltd, Acteon and Buckthorn Partners LLP. As this is the first time that I have spoken to a Statement on an energy debate from the Front Bench since I was Minister for Energy, I inform the House that I have spent my working life in the energy sector. I was also Minister for Energy in the Margaret Thatcher and John Major Governments and aimed to maximise a low-cost oil and gas province in the UKCS, always emphasising production with the highest importance attached to the environmental impact of all offshore activity, while in 1990 simultaneously launching the non-fossil fuel obligation, the renewable support framework and establishing the UK renewable energy advisory group. I place that on record because that political experience informs the contributions that I intend to make and the questions that I will be asking.

It is axiomatic that we should judge the Statement against the principles of creating greater energy security; increased affordability to all consumers, both industrial and domestic; strengthening the base of low-cost, firm power in the grid; and moving towards cleaner energy. Every decision we take should be addressed against fuel poverty. How can this be so when the order promises the highest prices for intermittent offshore wind in over a decade? How can it be affordable to the UK industry when this order is still more expensive than the £80 per megawatt for gas—which goes down to £55 if you deduct the government-imposed carbon taxes? How can it be when the overall price of contract extension is 24% higher than last year? Why are the Government using the levelised cost of energy matrix when we should be using the only true cost comparator, a full systems cost? As it is intermittent power, do the Government acknowledge that we need more firm gas power plants anyway? Is it not the case that the Government told NESO that there need to be 40 gigawatts of backup generating capacity?

Let us look at what is happening this evening. At a time when the wind is hardly blowing, is it not the case that we are here, this evening, generating nearly 60% of our power from firm gas and only 18% throughout the whole of the United Kingdom from intermittent wind? Worse still, is it not the case that we are importing gas from an increasingly unstable global economy and burning more CO₂ through imported LNG than we would if we developed our own resources to the full, while this minute continuing to burn biomass in Drax, which is more polluting than coal and comes, at this point in time, to only 50% of the total wind generation throughout the whole of the United Kingdom?

Does the Minister agree with Prime Minister Støre of Norway who, at the same time as the Secretary of State was making this announcement, faced the country and stated that he regarded Norway as facing many similar choices to us in the North Sea? He said:

“gas … is crucially important for Norway, and should be developed, not phased out”.

He also said:

“The oil and gas industry is crucial for Norwegian jobs and our welfare state. At the same time, Norwegian gas has never before been as important for European energy security as after Russia’s full-scale invasion of Ukraine”.


Does the Minister agree with him?

Does the Minister agree with Jensen Huang, the CEO of Nvidia, who came to these shores in September 2025 and stated on a visit that the UK will need to utilise natural gas-fired power alongside renewable energy to meet the massive energy demands of new artificial intelligence data centres? For without that strategy, we will have no chance of generating thousands of jobs with competitive new data centres.

We need to keep our eyes open to the economics of energy and to the wider UK economic and political consequences of this Statement and the Government’s energy policy. Does the Minister agree it reduces energy security by increasing the need to buy more foreign LNG to meet the need for firm power; that it increases unemployment through higher energy costs; and that it accelerates the Government’s deindustrialisation of the chemical and petrochemical industries, which was all over the news this weekend, by pricing them out of the market? It drives a coach and horses through affordability for households and industries alike, and it takes us in the direction of significantly increasing the cost of energy when the rest of the world is managing to reduce costs in a highly competitive global market.

Yet, in this order, are we not faced with record subsidy contracts for offshore wind? Is there not a rise in the annual budget for fixed-bottom offshore contracts from the £900 million when the terms were first announced in October—only three months ago—to £1.8 billion last week?

Is the consequence not a poorer UK economy and a loss of jobs from the once prosperous Aberdeen now facing the chill winds of offshore recession? Is it true these are massive wins to the Germans who totally dominated the round and won the lion’s share of the contracts?

I conclude by asking the Minister whether he agrees with the analysis in the FT of the article which covered this round. One reader wrote:

“We have … just about the highest electricity prices in the world despite access to relatively low cost North Sea gas…We have loads of gas boilers…so ongoing gas grid upgrades are required irrespective of…investment in extremely expensive renewables”.


Do the Government agree with Sir Dieter Helm that current UK electricity prices are high because the true system costs of integrating intermittent renewables—wind and solar—plus grid upgrades and back-up are not fully priced in? Does the Minister agree that we all want clean, low-cost renewable energy, and we all want, and can have, domestic gas production which has far lower impact on the environment than imported LNG or high-cost CO₂ emissions from Drax? Why can we not strive to deliver a policy built on these three pillars? I look forward to the Minister’s reply.