Asked by: Claire Coutinho (Conservative - East Surrey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, pursuant to the Answer of 29 April 2025 to Question 47816 on Renewable Energy: Electricity Generation, what the annual cost to consumers of the Offtaker of Last Resort scheme has been since 2015.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
Since its launch there have been no applications to the OLR scheme and no Backstop PPAs have been entered into. The only costs related to the scheme are the administrative costs incurred by Ofgem. The cost of the scheme for 2024/25 was £26,902. Details of the activities associated with these costs can be accessed here: https://www.ofgem.gov.uk/publications/offtaker-last-resort-olr-annual-report-april-2023-march-2024
Asked by: Claire Coutinho (Conservative - East Surrey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, if he will make an estimate of the potential impact of the smart export guarantee on annual costs to consumers in each year since 2020.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The Smart Export Guarantee is a market-driven mechanism that captures the value of small-scale exported electricity and helps meet net zero commitments at the lowest net cost to consumers and businesses.
This means that SEG tariffs are set by energy suppliers and the SEG is not expected to lead to a direct cost on consumer bills.
Asked by: Claire Coutinho (Conservative - East Surrey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what estimate his Department has made of the proportion of Distribution Use of System charges that were the result of connecting renewable energy generation assets in each year since 2002.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The Government does not hold this information. Distribution Use of System (DUoS) charges are paid for by electricity suppliers and distribution connected generators
and passed onto consumers through electricity bills. Each Distribution Network Operator (DNO) publishes charging statements every year, which are publicly available on their websites. The system is experiencing rising DUoS charges, due partly to the costs of upgrading the network to connect renewable generation and storage. However, the Government does not hold estimates apportioning overall distribution network costs to these generation sources specifically.
Asked by: Claire Coutinho (Conservative - East Surrey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what estimate his Department has made of the annual cost of Distribution Use of System charges since 2002.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The Government does not hold this information. Distribution Use of System (DUoS) charges are paid for by electricity suppliers and distribution connected generators
and passed onto consumers through electricity bills. Each Distribution Network Operator (DNO) publishes charging statements every year, which are publicly available on their websites. The system is experiencing rising DUoS charges, due partly to the costs of upgrading the network to connect renewable generation and storage. However, the Government does not hold estimates apportioning overall distribution network costs to these generation sources specifically.
Asked by: Claire Coutinho (Conservative - East Surrey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what estimate his Department has made of the proportion of Transmission Network Use of System charges that were caused by the (a) expansion and (b) reinforcement required for renewable energy in each year since 2002.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The Government does not hold this information. Transmission Network Use of System (TNUoS) charges recover the cost of installing and maintaining the high-voltage transmission network, which are paid for by electricity suppliers and transmission-connected generators and administered by the National Energy System Operator (NESO). The charges reflect the costs imposed on the network by generators and demand in different locations. NESO publishes annual TNUoS charges here: https://www.neso.energy/industry-information/charging/tnuos-charges#TNUOS-tariffs-and-notifications-of-changes.
Asked by: Claire Coutinho (Conservative - East Surrey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what estimate his Department has made of the proportion of Balancing Services Use of System charges that were caused by the management of renewable energy generation assets in each year since 2002.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
Balancing Services Use of System (BSUoS) charges are administered by the National Energy System Operator (NESO). The variable nature of renewable and low carbon intermittent sources of generation can require NESO to undertake additional grid balancing actions. The Government does not hold data apportioning overall balancing costs to these generation sources specifically. NESO publishes BSUoS charges here: Balancing Services Use of System (BSUoS) charges | National Energy System Operator
Asked by: Claire Coutinho (Conservative - East Surrey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what estimate his Department has made of the cost of the Renewable Energy Guarantee of Origin scheme in each year since 2003.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
REGO certificates are issued by Ofgem to eligible generators for free, and certificates are then purchased by electricity suppliers to surrender in the Fuel Mix Disclosure process. This has generated a market for the sale and purchase of certificates.
The price of REGOs fluctuates, though credible external estimates suggest that the latest spot market price is around £7 a certificate. Ofgem reports 130 million certificates are issued per year, giving an overall market value of around £910m annually.
Asked by: Claire Coutinho (Conservative - East Surrey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, whether the Offtaker of Last Resort scheme has been implemented.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The Scheme was introduced on 1 October 2015 and is intended as a last resort to help renewable generators who have an Investment Contract or Contracts for Difference (CFD) contract, who cannot get a PPA through the usual commercial means. Ofgem administer the Offtaker of Last Resort and publish an annual report on the scheme’s operation.
Asked by: Claire Coutinho (Conservative - East Surrey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, pursuant to the Answer of 23 January 2025 to Question 24699 on Electricity: Artificial Intelligence, if he will publish the report by European Economic Research Limited on the future net energy demand of artificial intelligence when it has been received by his Department.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
It is DESNZ policy to publish contracted technical work once it has been independently internally peer reviewed. We intend to similarly publish the report by European Economic Research Limited once it is completed in April.
Asked by: Claire Coutinho (Conservative - East Surrey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what recent assessment he has made of the potential impact of UK Emissions Trading Scheme 's allowance allocation policy on (a) carbon leakage and (b) the offshoring of emissions.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The provision of Free Allocation under the UK ETS mitigates the risk of carbon leakage and associated offshoring of emissions by reducing industrial sectors’ exposure to the carbon price. The UK ETS Authority is reviewing Free Allocation policy to ensure it targets sectors most at risk of carbon leakage and is currently consulting on this topic, including alignment with the UK Carbon Border Adjustment Mechanism.
The Authority will assess how Free Allocation interacts with other policies to ensure a holistic approach to carbon leakage mitigation. An Impact Assessment will be published alongside the Government Response to the Free Allocation Review