Contracts for Difference Allocation Round 7: Offshore Wind Projects

Michael Shanks Excerpts

Wednesday 14th January 2026 Written Statements

[The Minister for Energy (Michael Shanks)]

The seventh contracts for difference auction results have been published today, unlocking a record 8.4 GW of offshore wind projects. We have taken a significant step forward in our mission, showing that clean power by 2030 is achievable and on track. Despite well-known global pressures facing the industry, we have delivered enough capacity to power the equivalent of over 12 million homes. This is a major result and means we can take back control of our energy, meet the growing demand of electricity and get bills down for good for working people.

For fixed-bottom offshore wind, this represents the single largest auction in European history. These projects will be built right across Great Britain, supporting skilled jobs and investment in coastal and industrial communities. The clearing price for offshore wind in this round was on average 90.91 per MWh, far below the auction’s price cap and significantly cheaper than the 147 per MWh cost of building and operating new gas plants.

This proves that clean, home-grown power is the most affordable and secure choice for the country.

These results include Berwick Bank, which is the first new Scottish project to be procured through the CfD in three years, and Awel y Môr, the first Welsh project to win a contract in more than a decade. This will provide a boost to the Scottish and Welsh economies, underlining this Government’s commitment to see all parts of the UK benefit from clean power.

These results also represent major progress in our efforts to lead the world in the emerging technologies of the future, securing 192.5 MW of floating offshore wind capacity. Winning projects include Erebus in the Celtic sea, and Pentland in Scotland, backed by pioneering investment from Great British Energy and the National Wealth Fund. This success builds on last year’s leasing round 5 auction of 4.5 GW of seabed. These additional projects will boost regional economies and ensure that Britain continues to reap the benefits of clean power.

This auction will unlock around £22 billion in private investment in every corner of the country, supporting at least 7,000 jobs in areas including Scotland, north Wales, Norfolk, and Yorkshire and the Humber—delivering a major boost for the economy.

In a world of increasing instability, this Government are determined to back secure, clean, home-grown power to drive down costs for families, and provide the energy security our country needs.

[HCWS1239]

SSEN Transmission Orkney Link

Michael Shanks Excerpts

Thursday 8th January 2026 Written Statements

[The Minister for Energy (Michael Shanks)]

I wish to inform the House that the Department for Energy Security and Net Zero intends to undertake a contingent liability under the statutory spending authority under section 50 of the United Kingdom Internal Market Act 2020. It is a bespoke, time-limited, capped policy indemnity offered by the UK Government to SSEN Transmission to satisfy the Scottish Environment Protection Agency’s permit requirements for SSENT’s Orkney transmission link project, under the Environmental Authorisations (Scotland) Regulations 2018. Upgrading and expanding the grid is critical to the Government’s clean power mission and growth objectives. The project was granted initial regulatory approval by Ofgem in 2019, and final regulatory approval in 2023, and was awarded a marine licence by the Scottish Government in 2020, which was extended in 2022 and 2024. This indemnity will enable the project to proceed, and avoid potential delays, by satisfying a regulatory requirement, subject to SSENT obtaining the necessary permits, ensuring long-overdue progress in connecting Orkney to the GB transmission grid. This critical grid infrastructure will unlock significant clean power capacity that Orkney possesses—including community renewable projects—and bolster security of supply for the islands, helping support a stronger local economy and delivering a more efficient grid for GB consumers which is fit for the future.

It is normal practice when a Government Department proposes to undertake a contingent liability that is novel, contentious or repercussive to present Parliament with a minute, in line with “Managing Public Money”. In line with this guidance, the liability will not be entered into until 14 parliamentary sitting days have elapsed following the laying of the minute.

The indemnity covers the extremely unlikely scenario where SEPA determines that an intervention is required, by virtue of SSENT’s construction activity resulting in a statistically significant increase in irradiated particles washed up onshore from disturbing irradiated particles on the seabed, and that the required intervention is beyond the scope of the Nuclear Restoration Services’ existing particle monitoring and recovery programme. The indemnity is time-limited for 20 years. Due to the extremely remote probability of this risk materialising, it is highly unlikely that this full cost would crystalise. HM Treasury has approved this proposal.

A departmental minute has today been laid before Parliament setting out full details of this contingent liability. In accordance with “Managing Public Money”, the liability will not be entered into until 14 parliamentary sitting days have elapsed following the laying of the minute. Subject to satisfaction of the relevant conditions precedent, the Orkney indemnity will become live as soon as practicable after 14 parliamentary sitting days have elapsed following the laying of the minute.

[HCWS1227]

Prax Lindsey Oil Refinery

Michael Shanks Excerpts

Tuesday 6th January 2026 Written Statements

[The Minister for Energy (Michael Shanks)]

On 30 June 2025, I made an oral statement regarding the deeply disappointing news that Prax Lindsey oil refinery had entered insolvency, and I made a written ministerial statement on 1 July 2025. I also made a written ministerial statement on 22 July 2025 providing further information on the insolvency process led by the official receiver. Today, I am updating the House on the sale of the site and the assets.

The insolvency process at PLOR is led by the court-appointed official receiver, who must act in accordance with his statutory duties and independently of Government.

After a thorough process to identify a buyer for the site, the official receiver has determined Phillips 66 Ltd is the most credible bidder that can provide a viable future for this site. The sale is expected to complete in the first half of 2026.

Phillips 66 is an experienced and credible operator, and this sale allows it to quickly expand operations at its neighbouring Humber refinery, with all remaining 250 staff guaranteed employment until the end of March 2026.

Phillips 66 plans to integrate key assets into its Humber refinery operations. This will expand Phillips 66’s ability to supply fuel to UK customers from the Humber refinery, boosting domestic energy security, securing jobs including hundreds of new construction jobs over the next five years, and driving future growth opportunities for renewable and traditional fuels.

This agreement marks the next step in securing an industrial future for the site and the workers, who were badly let down by their former owners.

The former owners left the company in a poor state and gave the Government very little time to act. That is why the Energy Secretary immediately demanded the Insolvency Service launch an investigation into their conduct and the circumstances surrounding insolvency. That investigation is ongoing.

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Energy Infrastructure National Policy Statements

Michael Shanks Excerpts

Tuesday 6th January 2026 Written Statements

[The Minister for Energy (Michael Shanks)]

I laid three updated energy national policy statements before Parliament for parliamentary approval on 13 November 2025: EN-1 (the overarching NPS for energy), EN-3 (renewable energy infrastructure), and EN-5 (electricity networks infrastructure). I am therefore pleased to inform Parliament that I am today publishing them as national policy statements under the provisions of Section 6(9)(a) of the Planning Act 2008, and laying copies before you as required by Section 6(9)(b) of the same Act. The statements are made under the Planning Act 2008, which applies to England and Wales.

The updated national policy statements support Government’s clean power 2030 mission and our efforts to build an energy system that meets clean power by 2030 and net zero objectives. These national policy statements provide clarity for industry and stakeholders on the Government’s clean power mission and are pivotal to our reforms to provide the UK with clean, affordable energy security.

[HCWS1222]

Nuclear Energy Infrastructure National Policy Statement

Michael Shanks Excerpts

Thursday 18th December 2025 Written Statements

[The Minister for Energy (Michael Shanks)]

Today I am pleased to announce we have designated the national policy statement for nuclear energy generation, EN-7, according to the Planning Act 2008. EN-7 now provides the planning framework for all nationally significant infrastructure projects proposing to use nuclear fission to generate energy, replacing EN-6, which applied to projects deployable by the end of 2025.

This marks an important milestone in delivering our ambition to make the UK a clean energy superpower, in part through an expansion and diversification of the UK nuclear energy industry. The designation of EN-7 builds on the momentum of recent Government action, including the publication of the Prime Minister’s strategic steer to the nuclear sector following the report from the nuclear regulatory taskforce. Our implementation of the report’s recommendations will shape a modernised, more agile regulatory environment, while maintaining the UK’s high standards of safety, security, and environmental protection.

Alongside EN-7, we will be publishing the EN-7 supplementary information. This document clarifies the planning and regulatory requirements for nuclear energy projects, helping applicants to navigate the process for applying for development consent, and to engage effectively with regulators and expert consultees. By providing practical advice, the supplementary information aims to streamline project delivery, reduce uncertainty, and support robust safety and environmental standards. It will be updated regularly to reflect stakeholder feedback, ensuring it remains a valuable resource for all involved.

The EN-7 and supporting documents, including the EN-7 supplementary information, are available on gov.uk.

[HCWS1208]

Draft Oil and Gas Authority (Carbon Storage and Offshore Petroleum) (Specified Periods for Disclosure of Protected Material) Regulations 2026

Michael Shanks Excerpts

Tuesday 16th December 2025 General Committees

[The Minister for Energy (Michael Shanks)]

I beg to move,

That the Committee has considered the draft Oil and Gas Authority (Carbon Storage and Offshore Petroleum) (Specified Periods for Disclosure of Protected Material) Regulations 2026.

It is a pleasure to serve under your chairship, Ms Barker. I apologise in advance to the Committee for my voice; I am full of the joys of the season, which are going around this place at the moment. I hope we get through this in one go.

The draft regulations were laid before the House on 24 November under the affirmative process. Like so much of what I seem to bring to these Committees, the draft regulations may appear technical, but they are hugely important. They are essential to the effective sharing of data within UK carbon capture, usage and storage and the offshore petroleum industries—data that underpins collaboration, transparency and innovation, all of which are critical to advancing our energy security. The data-sharing rules set out by the regulations will support the effective use of the UK’s carbon storage capacity and the contribution that it can make to delivering the Government’s mission to make Britain a clean energy superpower and accelerate our journey to net zero.

Carbon capture, usage and storage is a set of emissions reduction technologies designed to prevent carbon dioxide from being released into the atmosphere. Carbon dioxide captured from a range of sources, including power generation and industrial processes, will be transported for permanent storage offshore, deep underground, rather than being emitted into the atmosphere. Complementing our transition to home-grown clean energy, not only is CCUS essential to meeting our climate commitments, but it will safeguard our energy security and decarbonise power and industry in a way that drives economic growth.

The Oil and Gas Authority, now operating under the business name of the North Sea Transition Authority, regulates the secure permitting of carbon dioxide stores on the UK continental shelf. That means that anyone who wishes to explore for, or use, a geological feature for the long-term storage of carbon dioxide on the continental shelf must hold a carbon storage licence issued by the NSTA.

As set out in the Energy Act 2023, carbon storage licensees are responsible for complying with various obligations, including the reporting to the NSTA of information and samples obtained through the conduct of licensee activities. In our view, the wealth of data that carbon storage licensees gather during exploration or storage activities is a national resource, and its publication will accelerate the deployment of CCUS in the UK. That is why we introduced the Oil and Gas Authority (Carbon Storage) (Retention of Information and Samples) Regulations 2025, another thrilling statutory instrument, which came into force in May. Those regulations specify the types of information and samples that carbon storage licensees must retain and the periods for which they must be retained. These requirements ensure the preservation of valuable data on carbon storage activities on the continental shelf.

The draft regulations set out when the NSTA can publicly disclose carbon storage information and samples provided to it by carbon storage licensees, and which types of information and samples may be so disclosed. They will also amend when the NSTA can publicly disclose information on the drilling or operation of wells under offshore petroleum licences; the timeframe for that was set out in the Oil and Gas Authority (Offshore Petroleum) (Disclosure of Protected Material after Specified Period) Regulations 2018. This amendment to the 2018 regulations will bring the NSTA disclosure powers across CCUS and offshore petroleum into alignment.

Information and samples play a significant role in the UK carbon dioxide storage industry. Access to high-quality data for the NSTA, industry, academics and the public will help to deliver efficient ways to utilise the UK’s storage potential. The carbon storage information and samples published will support the sharing of knowledge and lessons learned, including best practices and innovation, ultimately leading to cost reductions and the overall advancement of the sector. That includes accelerating the North sea’s energy transition. The NSTA helps to drive that transition by realising the significant potential of the UK continental shelf as a critical energy and carbon abatement resource. The draft regulations will further provide opportunities for the industries based offshore, with very significant potential for storing carbon dioxide in the depleted oil and gas fields and other geological formations on the UK continental shelf.

The NSTA consulted on the carbon storage and the offshore petroleum aspects of the regulations—under the previous Government, I might say. The consultation on the amendment to well data confidentiality closed in 2022; a response was published in 2023. The consultation on the proposed regulations for the disclosure of carbon storage information closed in April 2024; a response was published in October 2025. Feedback from both was positive and has been carefully considered to ensure that the draft regulations reflect industry needs and best practice.

CCUS is critical to the UK’s future energy security and to our industrial ambitions. The draft regulations may be technical, but they are imperative and will enable a wealth of data to be made accessible, which will ultimately support the advancement of the CCUS industry and the future of industries on the UK continental shelf. I commend them to the Committee.

--- Later in debate ---

[Michael Shanks]

It is always a pleasure to end the year on a high with the shadow Minister agreeing with the Government. I wish it happened more often.

[Andrew Bowie]

Don’t get used to it!

[Michael Shanks]

I think the shadow Minister was actually congratulating his own work when he was in my role several years ago, but it is a treat nevertheless. I thank him for his support and echo his comments about the NSTA; its primary role is that of a regulator, but it also does a phenomenal amount of work to bring the industry together to look at how it improves on its practices. I also echo his thanks to Stuart Payne and the team for their work.

I turn to the shadow Minister’s questions. First, our purpose is not just to bring both sets of regulations into alignment; it is also important to recognise that a lot of the decommissioning work is moving further and further to the right. It will be a huge economic opportunity for us if we can ensure that that work happens. This is partly about making sure that the regulations are aligned, but it is also about ensuring that action can be taken against those who are not meeting the deadlines. Beyond the draft regulations, wider work is going on to ensure that we are enforcing our expectation of decommissioning work being concluded, not least because the public will end up on the hook for many of the costs if that work is not done.

On the question about the administrative burden, we look at these issues in the round, but there were consultations with the industry in 2023 and 2024 and no objections were raised by industry bodies. I think we had 11 responses, including three from industry representative bodies and five from individual companies, and overall the consultation received a positive response, so our sense is that the draft regulations will be warmly welcomed.

On the specific question of enforcement, one of the issues that we addressed in the North sea plan was how we will look at the enforcement powers of the NSTA. We will say more about that when we introduce legislation in due course.

I welcome the support for these measures, and indeed the work of the previous Government on setting up the landscape for carbon capture and storage. It is a huge opportunity for our country, and we look forward to moving it forward.

Question put and agreed to.

Small-scale Fracking Ban

Michael Shanks Excerpts

Wednesday 10th December 2025 Westminster Hall

[The Minister for Energy (Michael Shanks)]

It is always a pleasure to serve under your chairship, Sir Roger. I thank my hon. Friend the Member for Scarborough and Whitby (Alison Hume) for securing this debate, for her fantastic speech and for all her campaigning on this issue and many others since she was elected. She is a fantastic champion for her community. I also thank her for all the conversations we have had on this issue.

My hon. Friend the Member for Scarborough and Whitby noted the importance of this Government’s climate commitments. I think it is useful to restate those for context. In the face of a fractured consensus—pardon the pun—this Government are absolutely committed to tackling the climate emergency. That is why our clean power mission and everything we are doing in Government is about getting us off the rollercoaster of fossil fuels as quickly as possible. It also means managing the role that oil and gas plays in the country at the moment.

Just a fortnight ago we published our response to the consultation on the future of the North sea—our “North Sea Future Plan”—which includes not just the future actions in the North sea, but our approach to the onshore oil and gas sector. We have set an ambitious and pragmatic approach to cease new oil and gas licensing and explore new offshore and onshore fields while managing existing fields for their lifespan; I will come back to that point later. That is all about helping manage our transition from fossil fuels—what we have to do for climate change—but also how we invest in what comes next and the clean energy that will bring down people’s bills and deliver our energy security.

I have listened closely to the points made by my hon. Friend in today’s debate, and in the correspondence that I have had with her and our other meetings. My Department has also been aware of these concerns through correspondence from other Members in this place and the recent e-petition that was considered. I want to be clear on this Government’s position towards hydraulic fracturing—both high-volume hydraulic fracturing for shale gas and more conventional low-volume hydraulic fracturing.

Regarding high-volume fracturing for shale gas, the Government have committed to end fracking for good, as my hon. Friend noted. On 1 October, my right hon. Friend the Secretary of State announced legislation that will be introduced soon to end new onshore oil and gas licensing in England, including new licences that could be used for high-volume hydraulic fracturing for shale gas, which is commonly understood as fracking.

My hon. Friend the Member for York Outer (Mr Charters) made a powerful point about our opponents in this debate. The idea put forward by Reform that we should not only not continue with our moratorium, but embrace fracking as a form of energy and start doing it all across the country, goes into the bucket with so many of their policies that are backward, dangerous and ill-conceived. We will absolutely reject that approach and we will legislate to make sure that our commitment will stand in the statue books for the future.

There is already an effective moratorium on high-volume hydraulic fracturing for shale gas—fracking—in England, and that will continue to apply to all existing licences. That is in place because of concerns that were raised around the prediction and management of induced seismicity in that type of fracturing. There are similar restrictions in place in other parts of the UK; taken together, that existing moratorium for currently licensed fields and the end of licensing for new fields means that no fracking for shale gas takes place anywhere in the country, and no new licences will be granted that could be used for that in the future.

The point made by my hon. Friend the Member for Scarborough and Whitby is about low-volume hydraulic fracturing, which has been the focus of today’s debate. I want to be clear that this Government make policy based on evidence. Although I have listened very closely to her points today and in the past, the evidence base is not there at the moment to suggest that low-volume hydraulic fracturing activities have the same associated risks as fracking for shale gas.

A small number of those activities take place—including, for example, proppant squeezes at volumes lower than the thresholds for fracking generally, as currently defined in legislation. The small number of those activities are not currently in scope of the effective moratorium that is in place. She rightly asked whether I would consider a review of that definition; of course, I keep all these things under review, and I am very happy to continue to review new evidence as it comes forward, but any change has to be based on evidence. We have to see additional evidence to what we have reviewed on the definition, but that is not there at the moment.

Low-volume hydraulic fracturing activities under existing licences take place in the context of conventional oil and gas operations. They require a range of permissions and consents before they can be undertaken, which include planning permission from the relevant local authorities and the necessary permits and consents from the North Sea Transition Authority, the Environment Agency and the Health and Safety Executive. That system ensures that operations meet the safety and environmental standards and obligations set out in law, and activities will be approved only if each of those stages is positively completed.

My hon. Friend noted the point about existing licences, and I want to reiterate what our manifesto said. There were two parts to that commitment: we said that we would not issue new licences to explore new fields—we will legislate for that soon—but that we would not revoke existing licences. It is the Government’s position that existing licences are in place and we do not intend to rescind them.

This is clearly a complex issue. I understand, as my hon. Friend has raised today, that there are real concerns from communities about any of these kinds of projects. Although the evidence base is important for us to make decisions here, I do not discount for a second the concerns that communities have. I want to hear those concerns from across the country. I remain very open-minded, as does my right hon. Friend the Secretary of State, to new evidence coming forward to look at this definition, but for obvious reasons, it is important that the Government make policy decisions based on evidence that can stand up to scrutiny if ever challenged in court. That evidence base is critical.

[Mr Charters]

In that evidence, will the Minister include water scarcity? In York and across the region, people have not been able to fill up a paddling pool, so why should water be used in low-volume fracking?

[Michael Shanks]

I appreciate that point; I am sorry for not mentioning it earlier, as my hon. Friend made it before. It is an important point, and we need to look at water scarcity right across the policy landscape. Demand for water is increasing in a number of areas—for example, I am looking at it in terms of data centres at the moment. The Government must look at the uses of water, as well as building new reservoirs to ensure we have water supply. That is an important point that will be taken into consideration by the Environment Agency and as part of the local planning process, but I will take it away and see whether there is anything more we can do on that.

The Department and I are keeping low-volume hydraulic fracturing under active review. We are open to receiving objective evidence, wherever that may come from; we will review that and look at whether definitions need to change and whether other legislation is required, but the position is as I have set out at the moment. I thank my hon. Friend the Member for Scarborough and Whitby again for bringing this debate to Westminster Hall, and other hon. Members who have participated. I appreciate the engagement on the issue, which I am confident that my hon. Friend will continue. I look forward to that.

Question put and agreed to.

Net Zero Transition: Consumer-led Flexibility

Michael Shanks Excerpts

Tuesday 9th December 2025 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is always a pleasure to serve under your chairship, Mr Vickers. I thank the hon. Member for Thornbury and Yate (Claire Young) for leading this debate and for setting the scene incredibly well. It is always a pleasure to see the Minister in his place; I look forward to the helpful and positive remarks he always makes. It certainly gives a lift when he answers the questions, and I am quite sure he will do likewise today.

[The Minister for Energy (Michael Shanks)]

Lower your expectations.

[Jim Shannon]

No, no—upwards! Everything upwards. It is also a pleasure to see the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith), in his place and I look forward to his contribution as well.

Consumer-led flexibility is so important. It refers to ordinary households and small businesses adjusting their energy use to support a cleaner and more resilient energy system. Who does not want that? It is about how we make it happen, however, and whether there is a cost factor to it. Can people make the changeover—the transition, so to speak—in a way that achieves the goals but does not inhibit their pocket financially in the way it sometimes might?

The cost of energy has been such a huge issue nationwide. I know from my constituents that it is a real problem. The two things that affect them more than anything else are the price of foodstuffs and the cost of energy. Especially as we head into winter, the cost of energy becomes a critical factor. It is about balancing one’s income at the end of the month to ensure that all those things are covered. For my constituents, that is a real problem with increasing costs and consumption, so it is good to have an opportunity to represent them in this Chamber today.

I always add a Northern Ireland perspective to the debate, and I know that the Minister always endeavours to reply to us in Northern Ireland on how Westminster can help, so it is important to put that on the record. For a just transition in Northern Ireland, any move to low-carbon energy systems must be fair, affordable and supportive of communities reliant on older heating fuels.

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[The Minister for Energy (Michael Shanks)]

It is a pleasure to serve under you today, Mr Vickers. I am frequently told that consumer-led flexibility does not get enough time, but I now have almost an hour to talk about the Government’s plans on it. I intend to use every moment I have.

[Martin Vickers (in the Chair)]

You don’t have to!

[Michael Shanks]

No, I don’t intend to—do not worry, colleagues.

This is an important debate, however, and I thank the hon. Member for Thornbury and Yate (Claire Young) for securing it. She made a point that those in the industry make regularly to me: that this is too often a footnote in the discussion about achieving our future energy security. It should not be. It should be much further up the agenda. It is not for want of trying; I often talk about it, but it is regularly the bit that gets cut out of interviews before they are broadcast. The Government are certainly talking about these issues.

The hon. Lady outlined perfectly the problem of how we get cheaper, more secure power to homes and businesses, and the three fixes: building more grid, strategically planning where energy is built in the first place, and utilising flexibility. The truth is that we need to do all three at a pace never before seen in this country. I will come back to those points, but I welcome her recognition of them.

My hon. Friend the Member for Washington and Gateshead South (Mrs Hodgson) made a fantastic speech, as always. She is a fantastic champion for the north-east and a long-standing campaigner on the issue of how we can reduce fuel poverty. She made the point that we risk losing the opportunity of getting cheaper power to people’s homes and bringing down their bills, and she mentioned the fantastic innovations out there already. I have had the pleasure of seeing a number of them. When I visited the Mining Remediation Authority recently, I had the genuine pleasure of hearing about the mine water heating scheme. That is a fantastic example of how we can utilise something that we used decades ago to power the country. There is also a social justice argument, as those communities who still have deep scars from that period can benefit from cheaper bills in the long run.

I also want to recognise the point the hon. Member for Thornbury and Yate made about the equality aspect and how we will bring everyone with us on this transition. I will return to that point, but first I want to return to first principles and say why the Government are committed to delivering clean power by 2030. At the heart of that mission is an energy system that delivers flexibility for consumers: not forcing consumers to make choices, but giving them the opportunity to make choices that bring their bills down, and to use technology for the betterment of their lives in a way they choose.

The clean power action plan outlined 10 GW to 12 GW of consumer-led flexibility. I think that in the months ahead we will be talking much more about that part of the action plan. The Government have had to move very quickly in the first 16 months to deliver on the auctions in offshore and onshore wind, to lift the ban on onshore wind and to deliver much more solar than we have ever seen, but flexibility has been hugely important in the background, and we will say much more in public about it in the coming months.

Let me respond briefly to the core argument that the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith), made about the clean power mission:

“The UK is a world leader in renewable energy…and we must go further. Energy security means national security. We must replace imported fossil fuels with cheaper, cleaner, domestic sources of energy. That is how we will ensure that the UK never again suffers the rising prices caused by Putin’s weaponisation of energy following his invasion of Ukraine.”—[Official Report, 22 November 2023; Vol. 741, c. 21WS.]

Those are not my words, but the words of the shadow Secretary of State, the right hon. Member for East Surrey (Claire Coutinho), in November 2023. I am not quite sure what has happened to the Conservative party in two years, but the Conservatives seem to have completely changed not just their position, but their understanding of the facts and science behind what they were saying then. The right hon. Member, who was Secretary of State at the time, made my argument just as well as I could ever seek to. I will leave it at that.

A just transition has the power to unlock enormous benefits for people right across the country. It is why we have pledged to deliver clean power, because we know it is cheaper and it removes the volatility of which all our constituents are still facing the cost. It will shield consumers from the volatility in global gas prices, over which we have absolutely no control, but it will also create new jobs in industries right across the country. It is the economic opportunity of the 21st century.

The role of storage will be important. The hon. Member for Newton Abbot (Martin Wrigley) talked about a school trip to Dinorwig; in Scotland, I think every single school child went to Cruachan, the hollow mountain, which is another pumped hydro power station. Although pumped hydro may be a technology from the last century, it is critical in this century as well. Indeed, the Government have launched the first new long-duration energy storage in 40 years. It is a critical way of dispatching clean power and storing it for when we absolutely need it, so it still plays an important role.

Consumer-led flexibility will play an important role in getting renewable energy to people’s homes. It will help us to balance the grid and ensure that we have supply when we need it. It enables us to take advantage of low-carbon energy and reduce periods of peak demand and the associated infrastructure needs. It also involves financial rewards for those who choose to shift their electricity use to times when supply is more abundant, cheaper and cleaner. Smart meters are a key part of that. As we all know from our constituencies, we would all have liked to see a more efficient roll-out of the smart meter programme over the years, but 70% of meters across Great Britain are now smart or advanced meters, with more than 40 million homes and businesses having them installed.

We will continue to monitor the roll-out in Government very closely. Indeed, I chair a working group that is looking at how we can deliver market-wide half-hourly settlements much faster. That is really important so that consumers and businesses benefit directly from having a smart meter and new technology.

[Jim Shannon]

I thank the Minister for the positivity of his answers. The take-up of smart meters in Northern Ireland has not been good at all—nowhere near expectations. In his discussions with the relevant Minister in Northern Ireland, what can be done to help us to do better back home?

[Michael Shanks]

I will come to the hon. Gentleman’s point. I always appreciate the kindness of his contributions, although he needs to lower his expectations of mine. He rightly mentioned the statistic that 68% of households in Northern Ireland have oil heating, which he raised with me in a previous debate. That figure surprised me, and it is a reminder of the complexity of the different circumstances across the United Kingdom of Great Britain and Northern Ireland. I work closely on this issue with Northern Ireland Executive colleagues in the Department for the Economy, and we share much of our good practice to make sure that everybody comes with us on this journey. I will shortly say more on the hon. Gentleman’s point about gas.

We are already seeing consumers benefiting from flexibility. Last year, the demand flexibility service saw over 2 million households and businesses save money by flexing their demand. We are committed to ensuring that all consumers have the option to participate, not just those who can afford certain technologies. The Government have committed £1.5 billion through the warm homes plan, which will help to upgrade low-income households. The Government will also work to ensure that flexibility is simplified and accessible for all consumers who want to take part, not just the tech savvy and those who are already able to. We have to remember that flexibility brings down the price for everyone, even those who are not participating, because of the benefits it brings to the overall system.

As we shift away from gas, consumer-led flexibility will become even more vital for managing an electrified system. Crucially, it will bring down bills for all consumers, not just those who actively participate. The Liberal Democrat spokesperson, the hon. Member for Newton Abbot, gave a figure on the direct benefit from consumer-led flex, and a more flexible system is estimated to save up to £10 billion a year overall because of that efficiency. It is hugely important.

The hon. Member for Strangford (Jim Shannon) asked about the transition. Obviously, connecting to the gas network is difficult in Northern Ireland, and this is a huge opportunity for many households to jump a step—from oil heating to heat pumps and other technologies. There is a real opportunity for those households to benefit, perhaps even more than some other households, if we get the transition to consumer-led flex correct. I look forward to more conversations with the hon. Gentleman on that issue.

The other point I want to make is about the role of technology. Consumer-led flexibility is becoming increasingly automated, which means that consumers can benefit from these opportunities with little or no intrusion in their daily lives. Indeed, I have seen examples where consumers have set up technology and let it run for months at a time. For example, an EV owner can plug their car into a smart charger, which will optimise charging so that it happens at the most cost-effective times of the day, while still meeting the battery charge they need the next morning, saving a significant amount of money.

I recently had a great opportunity to visit Flexitricity in Edinburgh, which is a fantastic business—not least because it has a fantastic view of Edinburgh castle, although that was not my reason for visiting. My visit brought home two things: first, the cutting-edge technology and innovation that we already have in this space; and secondly, how this is an opportunity to create high-paid, skilled jobs across the country. I met a number of apprentices and people who had changed career to be part of that innovation—the business is a fantastic example. I thank the Association for Decentralised Energy, some of whom I see in the Public Gallery today, for joining me on that visit and for the work they do.

We recently published the flexibility road map, which sets out specific, measurable actions for DESNZ, Ofgem and NESO to deliver the flexibility we need. The road map sets out a strategy and clear actions to make sure we can deliver on this. It acknowledges that the Government, in partnership with Ofgem and NESO, will need to take a leading role in making sure this is a priority for those organisations. The publication puts consumers at the heart of what we want to achieve.

The road map is a first step. To deliver it, we know we have to sustain that momentum. As many hon. Members have said, agreeing that this is the right thing to do is not enough; we have to get on with delivery. This debate is perfectly timed, because this afternoon I will attend the first clean flexibility road map quarterly forum to make sure we are driving progress on this. That was already in the diary, but this debate is perfect timing.

I thank the ADE for all its engagement and expertise on this matter, and I thank all the organisations working in this space for raising innovative and creative ideas for how we can make this happen faster. This is an area where the Government do not always know best, and the innovation from the private sector and communities across the country will help us to deliver this transition. It is crucial that the Government continue to hear that, and that we continue to be challenged to move further and faster.

We have seen good progress on leadership, which goes hand in hand with our work on the road map and on the appointment of a flexibility commissioner. We will be able to announce who we are appointing very soon, and they can then get on with driving this work forward as part of the clean power mission. Leadership is important more generally in this space. As politics moves away from a fact-based, rational discussion of the challenges this country faces, it is ever more important that we have these debates on the detail of how we deliver such important policies.

We must also recognise that we are making progress. There is sometimes a tendency to think that nothing is happening, but a huge amount is happening: the migration of consumers to half-hourly settlement has begun and is making great progress; NESO is about to consult on the next iteration of the demand flexibility service; Ofgem is assessing how to recover costs through bills in a way that is fair and efficient; and we have consulted on our smart secure electricity systems programme, including how we can make it easier for electricity consumers to participate. All that work going on in the background will start to have a real impact on people’s lives in the coming months.

I thank everyone for their contributions to this debate. The Government are committed to delivering a clean power system, because that is the only way to bring down people’s bills in the long run, to remove the volatility of fossil fuels, for which we are paying the fossil fuel penalty, and to deliver energy security in an increasingly uncertain world. Flexibility is at the heart of this, and for us to have a genuinely just transition—one that brings people with us—we have to do what is challenging. This is a new way of working. It is different, and it will require people to think differently about their energy use and about how we deliver the change as a country, but opportunity is right at the heart of this—we should never forget that opportunity is the prize if we achieve this.

We will continue to work across Government and across the energy sector so that people can take advantage of the benefits of consumer-led flexibility and so that, ultimately, we end up with a 21st-century energy system that recognises that all our lives have changed in the last few years in how we consume electricity. Every single projection suggests consumption will increase over the coming years, so it is hugely important that we take these steps now so that the people of this country benefit from the energy transition that is under way.

I thank everyone again, and I thank the hon. Member for Thornbury and Yate for securing this important debate.

[Martin Vickers (in the Chair)]

I thank the Minister for not taking the full 50 minutes available, which leaves more than the usual two minutes for Claire Young to wind up.

Capacity Market: Prequalification 2026

Michael Shanks Excerpts

Tuesday 2nd December 2025 Written Statements

[The Minister for Energy (Michael Shanks)]

I am tabling this statement to inform members of the publication of a consultation relating to the capacity market titled “Consultation on proposals to integrate low carbon technologies and enhance delivery assurance ahead of Prequalification 2026”.

The consultation supports our objectives of delivering clean power by 2030 and accelerating progress towards net zero, while ensuring security of supply.

Since its introduction in 2014, the capacity market has acted to secure sufficient capacity to ensure consistent and reliable electricity generation in Great Britain. The funding provided through the capacity market scheme incentivises investment in new and existing generation, interconnectors, batteries, and consumer-led flexibility mechanisms to ensure sufficient capacity is available to meet future demand when required. This capacity is acquired through competitive annual auctions held at intervals four years ahead and one year ahead of their respective delivery years. The Government regularly amend the framework underpinning the capacity market before auction cycles to ensure it is cost-effective and meets broader strategic objectives such as clean power by 2030.

The consultation we are publishing today includes several proposals intended to maintain electricity security, keep the capacity market’s impact on bills as low as possible for consumers, strengthen delivery assurance of low-carbon technologies, and improve the overall functioning of the scheme.

We are seeking views on changes to the capacity market which would achieve the following aims:

Managing the transition for existing generating capacity market units from the CM to a contract for difference following a Secretary of State direction, without allowing support from both schemes to be received at the same time. This would ensure value for money for consumers and would allow existing capacity to continue participating in the scheme. The change recognises the strategic importance of these assets for the UK’s energy transition and to security of supply.

Capturing interactions between the long duration electricity storage cap and floor scheme and the CM by introducing appropriate eligibility criteria for these projects to support low-carbon technologies while avoiding market distortions. The LDES cap and floor provides revenue certainty to accelerate the deployment of storage critical for a secure, low-carbon grid in line with its expansion in the 2030s. By mirroring the successful interconnector model, the cap and floor scheme guarantees developers a minimum revenue while capping excessive returns to ensure value for consumers.

Strengthening the CM delivery assurance framework by proposing two approaches to making the termination framework in the CM more stringent: either raising all fees by 30% in line with inflation from 2016 to today, or by simplifying the regime to have one fee, set at £45,500/MW, to reflect inflationary changes to the current highest fee since 2016. Both approaches improve the regime by disincentivising capacity providers from seeking to end their agreements via termination. The second option has the additional benefit of reducing the ability of capacity providers to seek alternate termination events that carry a lower fee by artificially creating the circumstances for a termination, for example by using shell companies to trigger issues regarding ownership of assets of grid connections. We are also proposing to hold credit cover until a new build CMU has completed commissioning their CMU in order to further incentivise capacity providers to build their CMUs and fulfil their obligations. Credit cover will be increased to align with the new uprated termination fee levels.

Amending CM rules on the secondary trading market to increase clarity in the CM rules.

Introducing additional measures for multiple price capacity market eligibility to ensure eligible capacity provides genuinely new capacity and offers value for money. This includes a new requirement to meet a higher capital expenditure threshold in order to qualify for the second, higher price cap. In addition, eligible capacity will be required to provide evidence of a certificate of disconnection where new builds are located on a previously commissioned site. The delivery body will also have the ability to request additional evidence to ensure all projects, whether eligible for the MPCM or not, are meeting the necessary total project spend requirements.

The proposals put forward in the consultation seek to ensure the capacity market continues to meet its primary objective of ensuring security of supply, remains fit for purpose and continues to play a crucial role in achieving the clean power mission.

[HCWS1117]

North Hyde Substation Outage Review: Government Response

Michael Shanks Excerpts

Tuesday 18th November 2025 Written Statements

[The Minister for Energy (Michael Shanks)]

In March 2025 the Secretary of State for Energy Security and Net Zero commissioned the National Energy System Operator to undertake a comprehensive review of the incident at North Hyde electricity substation. The review was to identify lessons and recommendations for the prevention, and management of future power disruption events, and lessons for Great Britain’s energy resilience more broadly. NESO published its review report on 2 July 2025.

The Government response to NESO’s report sets a clear implementation plan to make progress against NESO’s recommendations. We will build on this implementation plan through our commitment today to publish an energy resilience strategy in 2026. The strategy will set out the Department’s strategic priorities to ensure a secure and resilient energy system, now and in the future.

Energy resilience strategy:

On top of taking immediate action to address learnings from the North Hyde incident, it is critical that we also consider how the risk landscape is evolving rapidly and growing more complex. The Government’s clean energy superpower mission will drive a sector-wide transformation, offering a critical opportunity to further embed security and resilience into system design, strengthening energy reliability.

The energy resilience strategy will address sector-specific challenges across the entire energy system, like those identified following the North Hyde incident. It will set out this Government’s ambition to build power sector resilience across society, including the critical sectors that rely on energy to deliver our critical services, and it will create a framework to embed resilience across the energy system now and in the future.

North Hyde implementation plan:

The North Hyde implementation plan has been developed in collaboration with the energy resilience group—a partnership between Government, the regulator and industry. This ensures a joined-up approach to energy resilience, emergency response and recovery—will set out specific actions to enhance resilience across the three pillars of NESO’s review:

Resilience of energy infrastructure;

Response and restoration of energy infrastructure; and

Enhancing the resilience of critical infrastructure to energy disruption

The majority of actions will be delivered by the end of 2026 and will bolster the energy industry’s prevention and preparedness for exceptional events, reducing the likelihood and impact of energy disruption. While improvements will be made, no energy system can be totally immune from disruption, which is why, in tandem, these actions will support other critical national infrastructure sectors—just as transport—in enhancing their own resilience to such events, as far as is reasonably practicable.

The newly established energy security and resilience taskforce, chaired by the Minister of State at the Department for Energy Security and Net Zero and comprising senior energy sector representatives, will oversee and assure the implementation of these actions.

[HCWS1067]