Draft Contracts for Difference (Miscellaneous Amendments) Regulations 2022

Adam Afriyie Excerpts

Monday 23rd May 2022 General Committees

[Adam Afriyie (Windsor) (Con)]

I will be very brief. I just want to give the Minister some warning that I will ask a technical question, so that he has time to reflect before he makes his closing comments.

First, I welcome these regulations. Bizarrely, I actually quite enjoyed the Committee on last year’s regulations. For me, it enshrined what needed to be done to ensure that the market worked well for carbon capture and storage. Contracts for difference and the flexibility in the way that they are allocated make perfectly good sense. I was also reminded that, back in the 17th and 18th centuries, we in this place sometimes legislated for a specific piece of agriculture equipment. It has always struck me that, if we are too inflexible with the technologies that we define in legislation, we will get ourselves into difficulty.

These changes are very welcome. As pointed out by the Front-Bench spokesman, the hon. Member for Southampton, Test, power generation is evolving pretty quickly. People are developing membranes with algae that can absorb and store carbon. All sorts of technologies are under way, which is why I very much welcome these particular regulatory changes. In particular, I welcome the definitions of what constitutes a generator and carbon capture and storage—is it a complete system or a retrofitted system? That is all fantastic.

My technical question is: why are the reference price and strike price for these contracts for difference being marginally redefined or specified in a slightly different way? I was not clear on that. Could the Minister, on reflection, explain in his closing remarks why those two aspects of the regulations are being updated? I am sure it is for a perfectly good reason, but I would be interested to hear why.