Asked by: Chris Bloore (Labour - Redditch)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what steps his Department is taking to identify alternative financing models for flexible gas generation that ensure price stability for households and businesses as the grid decarbonises.
Answered by Michael Shanks - Minister of State (Department for Energy Security and Net Zero)
It has not proved possible to respond to my hon. Friend in the time available before Prorogation.
Asked by: Chris Bloore (Labour - Redditch)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, whether he has made an assessment of the potential impacts of different market models on decoupling wholesale electricity prices from gas price volatility.
Answered by Michael Shanks - Minister of State (Department for Energy Security and Net Zero)
It has not proved possible to respond to my hon. Friend in the time available before Prorogation.
Asked by: Chris Bloore (Labour - Redditch)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what assessment he has made of the effectiveness of the Contracts for Difference scheme in decoupling wholesale electricity prices from gas price volatility for household consumers.
Answered by Michael Shanks - Minister of State (Department for Energy Security and Net Zero)
It has not proved possible to respond to my hon. Friend in the time available before Prorogation.
Asked by: Chris Bloore (Labour - Redditch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of marginal electricity pricing on the Consumer Prices Index since July 2024.
Answered by Torsten Bell - Parliamentary Secretary (HM Treasury)
Forecasting the economy, including the impact of Government policy decisions on inflation, is the responsibility of the independent Office for Budget Responsibility (OBR). The OBR has not published a specific estimate of the impact of marginal electricity pricing on Consumer Price Index inflation.
The electricity market operates on the principle of marginal cost pricing, where gas-fired generation frequently sets the wholesale price, meaning electricity prices have closely tracked gas prices. This is link is already weakening as more renewable energy comes online. The Government is taking further steps to reduce this link: we will set out plans for legacy low-carbon generators to move onto fixed-price arrangements from 2027, and the Electricity Generator Levy's rate has been increased, and it will be extended beyond its scheduled end date. Further details on these measures will be provided in due course. As reliance on gas falls, electricity prices are expected to be set increasingly by lower-cost generation, including renewables.
Asked by: Chris Bloore (Labour - Redditch)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what assessment he has made of the potential impact of the marginal pricing mechanism on the revenues of renewable and nuclear electricity generators.
Answered by Michael Shanks - Minister of State (Department for Energy Security and Net Zero)
We will bring forward plans later this year to offer legacy low carbon generators the option of fixed price arrangements, with an intention to run an allocation process in 2027. Government will only offer contracts to electricity generators where it represents clear value for money for consumers. Further details will be set out in due course, with plans to consult later this year.