Energy Prices Act 2022 (Extension of Time Limit) Regulations 2026

Baroness Bloomfield of Hinton Waldrist Excerpts

Monday 13th April 2026 Grand Committee

Beyond this SI, the Government must accelerate renewables deployment; advance long-term energy market reforms; move more policy costs off bills and into general taxation; and bring forward a social tariff that is supported by improved data sharing and targeted assistance. We on these Benches will continue to hold the Government to account, but we will also support them where we can in the face of what may prove to be the most serious global energy crisis that our generation has ever seen.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank the Minister for bringing forward this statutory instrument, which introduces a minor amendment to the Energy Prices Act 2022 by extending the Secretary of State’s power to grant renewables obligation certificate funding by six months.

His Majesty’s Opposition do not oppose this instrument in principle. It is right that the Government’s efforts should be focused on the controllable—namely, policy costs. Indeed, it is welcome that the renewables obligation to Exchequer policy demonstrates the Government’s understanding that their choices have a direct impact on people’s bills; that is why the scheme is being advertised as proof of the £150 that the Government promised to take off energy bills.

However, reducing energy bills by shifting the costs from household bills on to general taxation is a rather disingenuous way of achieving government policy. Whether it is the Government or energy suppliers who pay the upfront fee to Ofgem, the cost of ROCs will still be borne by the public and the cost of renewables will continue to apply. Every time the sun shines, solar farms will receive one or two ROCs per megawatt hour, earning them up to double the wholesale price. Every time the wind blows, offshore wind farms will get almost three times the wholesale price, or £240 per megawatt hour. When these farms are forced to turn off due to insufficient grid capacity, they are in receipt of high-constraint payments of more than £200 per megawatt hour.

The renewables obligation deal will last for another 11 years. These costs are going nowhere, and nobody but the British public is going to fund them. The only result of the RO is to Exchequer policy, and this instrument will mean that the public are made less conscious of what they are funding. Absorbing costs into general government spending may make the cost of the renewables programme more discrete, but it will not save the public purse any money.

The upshot of this is that the renewable transition must be underpinned by a cheaper and more reliable source of energy. The immediate way of achieving this is through oil and gas, which we already manage by importing LNG from Norway and the Middle East. I completely agree with the substance and sentiment of my noble friend Lord Ashcombe’s contribution to this short debate. I am aware that this is not the topic of today’s debate, so I will brief, but the intermittent nature of renewables and our current capacity issues mean that we still need to rely on oil and gas. Even during the current war and the subsequent international spike in oil and gas prices, those prices are still cheaper than subsidised renewables. We have the opportunity to divorce ourselves from the vicissitudes of international affairs by exploiting our North Sea reserves, yet the Secretary of State remains as dogmatic as ever. He seemed to toy with the idea of domestic production over the Easter break but, as we sit here today, production at Jackdaw is still yet to commence.

This is in the Government’s control. If they really are committed to reducing energy bills, then, along with subsidising renewables in the long term, they should allow us to produce our own oil and gas in the short term. I hope that the Minister will at least agree with that sentiment; I look forward to his response, in particular to the four intelligent questions posed by my noble friend Lord Ashcombe.

[Lord Whitehead (Lab)]

My Lords, I thank noble Lords for their valuable contributions to this debate. I will try to respond to their concerns—including those of the noble Lord, Lord Ashcombe, who went a bit beyond this particular SI but nevertheless made important points and asked questions that deserve a response.

The noble Lord’s first concern was about whether I can outline a pathway towards permanent legislation here. I agree with him that permanent legislation is always better than re-sunsetting an original sunset clause from previous legislation, as he mentioned. Of course, the Energy Prices Act 2022 was put in place at a time of high crisis as far as energy bills were concerned—not completely dissimilar issues to the ones we face today, but rather more concerned with gas than with oil and fuel generally. Nevertheless, it is a piece of legislation that was designed at least in part to be sunsetted. In essence, what we are doing in this present crisis is re-sunsetting an Act that was originally intended to be sunsetted in the first place. It is quite right that we should bring that sunset request back to the House when we are making it.

Nevertheless, it is a much better idea to have legislation that properly fits the bill in the long term, which is the Government’s intention right now. I mentioned that we will probably want to come back one more time with a sunset extension, in order to make sure that these changes work properly in the long term, but, after that, there should be legislation in place to make a permanent arrangement that is properly workable for the future. Of course, the phrase “when legislative time permits” has a variety of interpretations attached to it, but it is basically a question of finding out to which bit of legislation you can attach this permanent version of a sunset clause. It might be the EIB, but there may be other legislation—we will have to see as we go forward. However, I can give an absolute commitment that we are dedicated to making sure that this happens in the not-too-distant future in order to regularise the circumstances over the longer term.

The noble Lord asked what we are doing to make sure that critical gas infrastructure remains viable. This is a subset of the understanding that, although the use of gas is declining substantially in Great Britain and will continue to do so, the overhead costs and infrastructure issues will remain. It is essential, therefore, that we make sure that the infrastructure is as viable as it can be in the long term and that the whole system does not fall down because we have a lower amount of gas going into and out of it. The Government are actively involved in undertaking that.

By the way, I might add that the increasing amount of biomethane and biogas going into the system—at present, it is about 7% of the total system—will go some way towards assisting the viability of long-term infrastructure. It is certainly this Government’s intention to increase, where possible, the amount of biomethane and biogas going into the system. That gives some indication of where we are on LNG imports, which, as the noble Lord mentioned, have a higher carbon footprint than natural gas, which in turn has a much higher footprint than biogas. At the moment, about 14% of our gas supplies are coming in via LNG. One of the advantages of an increased amount of biogas in the system is that it directly removes the need for LNG to come into the system. All other things considered, something like a 2% increase in biomethane going into the system would be the equivalent of turning around six LNG tankers and them not coming to UK shores at all.

On energy imports in general, the UK has a diverse supply. The noble Lord mentioned the substantial element of supply played by the Norwegian gas fields, some of which are landable only in the UK and not in Norway itself. There is also the continuing supply from the North Sea. I have mentioned LNG, which comes from diverse sources; at the moment, only 1% comes from sources in the Middle East, so that issue will not overturn the security of the gas system in the near future. I hope that I have given fair thought to the noble Lord’s valuable contribution.

I turn to the supportive and helpful contribution of the noble Earl, Lord Russell. He is right to add that this is the right thing to do right now, bearing in mind that we very much want to make sure that, in a time of such volatility, domestic and commercial bills are pressed downwards as far as is possible. The two measures I have mentioned rearrange the ways in which bills are charged to some extent, but they nevertheless have the real effect of bringing those bills down considerably. He is quite right to seek an assurance that that is not just a temporary fix for the time being but will be put on a more permanent basis; we are looking to secure legislation to make sure that that happens.

The noble Earl rightly mentioned information sharing on these measures and other measures that are likely coming forward to push down bills. He should be aware of the Utilities Act 2000 (Amendment of Section 105) Order, which has enabled the sharing of more detailed data than DESNZ currently holds between the department and Ofgem. The aim of that order is to ensure that more detailed data is properly safeguarded and is used for the intended purposes, not others. I hope that the noble Earl can be reassured on that basis.

I turn to the valuable contribution of the noble Baroness, Lady Bloomfield. It is true that these measures shift the burden of the legislation from particular consumers to more general taxation purposes. That is a fair thing to do, in terms of generally sharing the burden of increased electricity prices, but I accept that the Government are very much involved in making sure that, by changing the way the electricity market works, prices are much lower over a longer period of time.