Drax Power Limited: Ofgem Investigation

Earl of Effingham Excerpts

Monday 11th November 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I realise that it sometimes sounds counterintuitive. None the less, the carbon emitted during the supply-chain process, and in the process at Drax and places like it, is netted off by the growth in forestry, which absorbs the carbon. That is a well-accepted international approach. It produces 2.6 gigawatts at Drax, 4% of our electricity generation in this country, with over 2,500 people employed in the local region, and it is classified as renewable.

[The Earl of Effingham (Con)]

My Lords, the Government have introduced further environmental levies, which the OBR predicts will add an additional £2.8 billion to electricity bills between 2025 and 2030. Can the Minister please explain what support the Government will offer to consumers so they are not adversely affected by this move?

[Lord Hunt of Kings Heath (Lab)]

I remind the noble Lord that policy costs on bills have increased from £115 on average in 2010 to an estimated £309 in 2024, so a lot of this increase occurred under his Government and the previous Conservative and Lib Dem Administrations. If we are serious about going towards clean power and net zero then we have to accept that we must finance the development of new energy-generating structures, and that is the case for biomass. Equally, that has to be done under sustainability criteria regulations that will ensure it happens. As for the OBR, its analysis has highlighted that delayed action on reaching net zero will have significant negative fiscal and economic impacts.