Draft Contracts for Difference (Miscellaneous Amendments) (No. 3) Regulations 2025

Jerome Mayhew Excerpts

Monday 30th June 2025 General Committees

[Kerry McCarthy]

The shadow Minister went through his list of questions rather quickly. I will try to respond to some of his comments and answer a few of the questions, but apologies if I did not catch them all—I was trying to scribble away. We intend for the AR7 window to open on 7 August, and we will publish a final Government response very shortly, which will cover all the areas consulted on in March. On the administrative strike price, the shadow Minister cannot expect me to tell him now what the strike price will be. Ahead of every allocation round, we review our evidence base to ensure that it reflects the market environment. The administrative strike price for AR7 will be published ahead of the round opening—as I said, that round will open in August.

The shadow Minister talked about one of his favourite subjects: curtailment payments due to there not being grid capacity for wind. He will know, because he has been told this before in answer to previous questions, that we absolutely understand that issue, and we are prioritising increasing grid capacity to prevent it. Chris Stark, the former chair of the Climate Change Committee, is heading up mission control, and he is working every day—and possibly most of the night—to ensure that we give priority to the right projects in the grid connection. It is like towels on deckchairs; we weed out some of the projects that we know will never come to fruition, and we ensure that we invest in grid infrastructure so that we can make the most of the renewable energy being produced.

The shadow Minister asked why we are not investing in gas and nuclear. He has not been paying attention; he should know that there was a big announcement on nuclear. We are now also looking at small modular reactors. We have awarded Rolls-Royce preferred bidder status for that contract, which is attracting a lot of interest from around the world, to see if it can follow suit.

I am not sure it is worth our rehearsing the conversations about the cost of getting to net zero. I was going to say, “We are very much of the opinion”, but it is not an opinion—we know that the best way to bring down consumer bills in the long term is to get to clean power by 2030. We know that renewables will be cheaper for consumers and less volatile. Home-grown clean energy means that we will not be reliant on imported oil, gas and renewables. They are not only greener but faster to deploy and cheaper to build.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

The Minister says that making the transition by 2030 will be the best way to stabilise and reduce prices, but even if we go full steam ahead with SMRs, or large nuclear replacement of the ageing nuclear capacity at the moment, none of that will be onstream by 2030. What does she suggest will be the baseload provider for periods where it is dark and the wind is not blowing?

[Kerry McCarthy]

It is a whole factor. There is solar, onshore wind, offshore wind, and increasingly storage. We have nuclear as part of the mix now, and we have said—

[Jerome Mayhew]

Not for 20 years—not yet.

[Kerry McCarthy]

We have nuclear production in this country—[Interruption.] We have nuclear power as part of the mix. Obviously, the investment we have just announced does not come into effect for a while, but we have that as part of the mix. We have said that there will be 95% clean power with gas as a back-up if needed. We are not putting all our eggs in one basket by any means whatsoever.