Draft Electricity Capacity (Amendment and Transitional Provision) Regulations 2026

Greg Smith Excerpts

Monday 6th July 2026 General Committees

[Greg Smith (Mid Buckinghamshire) (Con)]

As ever, it is a pleasure to serve under your chairmanship, Mrs Harris. With your indulgence, I will start by welcoming the new Conservative Member, my hon. Friend the Member for Aberdeen South. I am sure that, in a series of firsts as he finds his feet around the House of Commons, his first Delegated Legislation Committee will be the one that stands out most in his mind.

As the Minister laid out, the draft regulations make several technical amendments to the capacity market. They are perhaps most notable for the absence of the proposed multiple price capacity market, which would have created a two-tier system that the industry warned would result in increased costs for consumers. I understand that the Government have said that these changes would

“ensure the continuation of security of supply while supporting the transition to a decarbonised energy system.”

However, can the Minister explain why the results of the latest four-year-ahead capacity market auction secured only 40 GW of generating capacity, which was 3 GW less than the year before? Not only is that less than the current peak demand of 50 GW, but it is less than the projected peak demand of around 80 GW by 2030.

His Majesty’s loyal Opposition have warned countless times that forcing decarbonisation and electrification on to families and businesses at any cost would simply result in industry shutting down and livelihoods being lost. Although the Government have rejected those warnings in public, the results of that auction seem to suggest that they have privately accepted the fact that industrial energy consumption will fall thanks to their policies.

I have no doubt at all that the Minister will seek to reassure the Committee that the Government’s mass roll-out of renewable energy and associated infrastructure will make concerns about security of supply redundant. However, what this completely fails to address is the cold, still winter nights when electricity demand is at its highest, yet generation from wind and solar is effectively nothing—precisely the scenario that the capacity market is supposed to address through securing firm power from conventional means, such as gas.

Even assuming the Government’s highly optimistic predictions that the billions of pounds-worth of additional generating capacity, battery storage systems and grid connections needed to support an entirely intermittent renewables-based electricity grid will be online by 2030—which currently seems very unlikely—that would still not ensure the security of supply that our electricity grid needs. As both the Government and the National Energy System Operator have admitted, nearly all our currently installed generating capacity from gas will need to remain online in 2030 to meet peak demand.

However, by refusing to support private investment to build new gas power stations, placing more burdensome decarbonisation requirements on new and refurbished generators, as well as pushing gas to the sidelines of our electricity supply while still expecting full capacity to remain available, the Government are making continued operation for many gas power stations economically and technically unviable.

Let us be very clear what the Government’s energy policy means: placing increasing strain on demand through legally binding electrification and decarbonisation requirements; reducing supply by failing to secure new firm power from gas; and the Government forcing families and businesses to ration electricity through consumer-led flexibility at the risk of facing blackouts. Although the Opposition do not oppose the very technical amendments made by these draft regulations, we believe that it is well past time for the Government to accept that they cannot sustain our energy system on blind faith in renewables, and that they must instead fully support new generating capacity from gas and nuclear.