Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government, further to the reply by Lord Henley on 4 December (HL Deb, col 850), what steps they intend to take to manage the risk of high electricity costs arising from the Hinkley Point C plant, particularly with regard to (1) poor people, and (2) commercial users.

The strike price for Hinkley Point C (HPC) is fixed at £92.50 (2012 prices, rising with CPI inflation) for each megawatt hour (MWh) generated over the first 35 years of operation. The strike price is made up of a combination of wholesale market prices and a levy on consumer energy bills and ensures that consumers will pay no more than this for electricity from HPC during the contract period. When wholesale prices rise above the strike price the developer will need to repay the difference. When shared across consumers (households and businesses), payments under the Contract for Difference will amount to around £12 of the average household bill over 2026 – 2030 (based on 2012 prices).

This Government is committed to tackling fuel poverty. In line with our commitment to upgrade fuel poor homes to band C by 2030 we are taking action to support households in fuel poverty. The Warm Home Discount provides over 2 million low income and vulnerable households each year with a £140 rebate on their energy bills, including this winter. Since April, 70% of the £640m per year Energy Company Obligation has been focused on low income households through the Affordable Warmth part of the scheme. It will upgrade the energy efficiency of over 300,000 homes per year, tackling the root cause of fuel poverty. We are also safeguarding the competitiveness of those energy intensive industries particularly exposed to the additional costs arising from the Contract for Difference by exempting them from a proportion of these costs. An exemption scheme allows for real-time changes in energy use to be taken into account and provides certainty to business.