Virginia Crosbie

Last winter, the Government provided a £200 support payment to those households who use alternative fuels through the Alternative Fuel Payment. Since then, prices of such fuels have decreased significantly, and consequently the Government does not intend to repeat the scheme this winter.

The Government is continuing to support those who need it the most, with millions of households receiving up to £900 in further cost of living payments. This is in addition to established support for vulnerable and low-income households through the Winter Fuel Payment worth £250 - £600 and the £150 Warm Home Discount, which has been extended to reach around a million more people compared with the previous scheme prior to winter 2022.

Minsters and Officials have regular meetings with Ofgem to discuss a wide range of issues, including standing charges.

Ofgem is currently seeking views on standing charges as the first stage of engaging in a debate on whether changes are required. Further information is available at https://www.ofgem.gov.uk/publications/standing-charges-call-input.

As part of the Review of Electricity Market Arrangements (REMA) programme, the Government is considering a range of potential options to shield consumers from the impacts of potential future commodity price spikes and to ensure they benefit from lower-cost renewables.

The Contracts for Difference scheme already insulates consumers against electricity price spikes. Over time, this scheme will significantly reduce dependence on fossil fuelled power generation, lowering consumer exposure to gas prices.

Oil prices have fallen from their 2022 peak and there are currently no plans for the Alternative Fuel Payment scheme to be renewed for Winter 2023/24. However, the Government will continue to monitor the situation and will keep our options under review.

The UK is a world leader in the nuclear fuel cycle, and this is testament to the highly skilled workforce currently employed within the UK supply chain. The Government recognises the importance of establishing a secure, commercial supply of High-Assay Low Enriched Uranium (HALEU) to support future reactors and deliver our net zero and energy security ambitions.

As such, we have launched the Nuclear Fuel Fund (NFF) to be used to alongside private sector co-investment, to preserve and develop the UK’s nuclear fuel production capability. Through the NFF, the Government is proud to have invested £10.5m towards the development and use of a supply chain for HALEU in the UK. The Government is considering any further steps that might be necessary to support the development of HALEU fuel.

In 2020, the Government committed up to £385m to an Advanced Nuclear Fund to provide funding for a Small Modular Reactor (SMR) design and to progress plans for an Advanced Modular Reactor demonstration by the early 2030s. In July 2023, the Government shortlisted potential grants from the Future Nuclear Enabling Fund, releasing up to £77.1m of targeted support for new nuclear development.

Great British Nuclear, the arms-length body responsible for helping to deliver new nuclear projects, has launched a Technology Selection Process (TSP) to select the SMR technologies best able to deliver projects by the mid-2030s. Six companies have been down-selected for the next stage of the process. The Government is also consulting in the autumn on alternative routes to markets for new nuclear projects, in addition to the TSP.

The British Energy Security Strategy set an ambition of up to 24 GW of nuclear capacity by 2050 to support energy security and net zero objectives. To deliver on this objective, the Government is undertaking a range of activities. We have launched Great British Nuclear, which has an immediate focus on bringing forward small modular reactors, we have invested in Sizewell C to deliver the next large-scale project, and we have provided support for a range of enabling activities through the Low-Cost Nuclear Challenge, Nuclear Fuel Fund and the Future Nuclear Enabling Fund.

In addition, we will publish a Roadmap this autumn setting out the long-term trajectory for the nuclear sector, as well as publish a consultation on alternative routes to market for new nuclear projects.

The Hydrogen Production Business Model will provide revenue support to producers to overcome the operating cost gap between low carbon hydrogen and high carbon alternatives. This will provide a contractual, producer-focused business model that could facilitate hydrogen use in a broad range of sectors, including low carbon ammonia production.

The Net Zero Hydrogen Fund will help to stimulate the growth of the hydrogen economy by providing £240m to support the development and construction of new low carbon hydrogen production plants. In addition, the Government is supporting innovation for shipping decarbonisation through funds such as the Clean Maritime Demonstration Competition.

The Hydrogen Strategy sets out the important role that low carbon hydrogen could play in decarbonising vital UK industrial sectors, providing flexible deployment across power, transport and potentially heat. The Government is providing significant support for research and development across these sectors.

The Government is supporting industry to deliver a hydrogen heating trial in Fife and the Tees Valley Hydrogen Hub, and discussing a potential village trial in Redcar, to understand hydrogen’s future uses better. The Government is working with industry partners to engage the public, informing them about hydrogen and what to expect. The Government will continue public engagement as hydrogen technology matures.

The Government has committed to outlining an approach to gas and electricity price rebalancing by the end of 2023/24.

The Government aims to make heat pumps as cheap to buy and run as a gas boiler by 2030 at the latest. The Government will do this by growing the heat pump market to support 600,000 installations per year by 2028 and expanding UK manufacturing with the aim of reducing costs by at least 25-50% by 2025.

Funding models, including the Regulated Asset Base (RAB) and Contract for Difference (CfD) are being considered for SMRs. The appropriate funding model for each new nuclear project will be determined in due course.

GBN will work across Government to support access to potential sites for new nuclear projects to achieve its long-term ambition. There is growing local and regional interest in a number of sites for further nuclear development. GBN would welcome any conversations with stakeholders who are considering whether their land might be suitable for the deployment of nuclear facilities in future.

New nuclear power is central to our plans for ensuring UK energy security and reaching Net Zero. Modelling in the 2020 Energy White Paper indicated that low-cost electricity system solutions at very low carbon intensities are far more likely to be achieved with a combination of new nuclear and gas CCUS.

I refer the Hon. Member to the answer I gave her on 27th March 2023 to Question 171588. The Government aims to publish a second Review of Electricity Markets (REMA) consultation in Autumn 2023 and will take decisions on shorter-term reforms more quickly where it is viable to do so throughout the REMA programme.

REMA’s overall timescale will depend on the extent of reform found to be necessary and could range from those that could be taken relatively quickly, to reforms that could take a number of years to implement – depending on the nature and complexity of the reform.

The promotion of energy efficiency is devolved to Wales. The Welsh Government provides funding for home energy efficiency improvements.

The UK Government works with the Welsh Government in respect of regulatory measures providing funding for energy efficiency, including the Energy Company Obligation which covers Wales, and the forthcoming £1 billion Great British Insulation Scheme, which could save around 300,000 of the least energy efficient homes £300-£400 each year.

The UK Government recently announced the extension of the Boiler Upgrade Scheme until 2028, to support the installation of heat pumps in domestic and small non-domestic buildings in England and Wales.

The Government works with Ofgem and network companies to accelerate connections by releasing network capacity and improving the connections process. As part of this work, the Electricity System Operator is seeking expressions of interest, by 30 April 2023, from developers who are willing and able to connect earlier than their allocated connection date. The Government will publish a Connections Action Plan in the summer, which will articulate actions by government, Ofgem and network companies to accelerate network connections, including for renewable energy and battery storage projects.

The Government recently published the “Powering Up Britain” publications which reaffirm the Government's commitment to accelerating delivery of electricity network infrastructure across Great Britain, as a critical enabler for energy security and net zero. The Government will publish an action plan to accelerate network connections in the summer and will respond to networks commissioner Nick Winser’s recommendations later this year.

The Government’s January 2023 response to the Welsh Affairs Committee’s inquiry also highlights work to upgrade grid capacity in Wales, including measures specific to offshore wind such as the Holistic Network Design, where Welsh Government officials are invited to attend relevant governance forums.

As part of the Review of Electricity Market Arrangements (REMA) programme, the Government is considering a range of potential options to shield consumers from the impacts of potential future commodity price spikes and to ensure they benefit from lower cost renewables.

The CfD scheme already insulates consumers against electricity price spikes. Over time this scheme will significantly reduce dependence on fossil fuelled power generation, lowering consumer exposure to gas prices.

The Holistic Network Design was produced independently by National Grid ESO as a key output of the government led Offshore Transmission Network Review. This process has identified a new network need between North and South Wales (PNSC). Detailed design work by the relevant Transmission Owner is ongoing and will consider the potential for both onshore and offshore options.

Final parameters for Allocation Round 5 (AR5) are currently under development. This involves a careful analysis of all technologies available in AR5, including tidal stream energy, against the Government's legal obligations. The Government is considering the appropriate parameters to ensure a competitive auction and the sufficient deployment of all technologies. Budgets set will reflect parameter decisions. A Budget Notice for AR5 with the full auction and budgetary details will be published in March 2023.

The Government consulted on phasing out the installation of heating systems using high carbon fossil fuels in homes, businesses and public buildings in England off the gas grid during the 2020s. The Government published impact assessments alongside these consultations. The Government will set out further details on these proposals when it responds to these consultations in due course. As this relates to a devolved matter it is for the Welsh Government to consider steps to decarbonise heat off the gas grid in Wales.

The Government consulted on phasing out the installation of heating systems using high carbon fossil fuels in homes, businesses and public buildings in England off the gas grid during the 2020s. We will set out further details on these proposals when we respond to these consultations in due course.