Electricity Market Review

Barry Gardiner Excerpts

Thursday 10th July 2025 Commons Chamber

[Ed Miliband]

The hon. Gentleman asks a bang-on question, and that is why I hope he will support clean power 2030. The key thing is that if we can get these renewables on to the system, gas will set the price much less often. As this is a CFD rather than a renewables obligation, the reductions in price feed through to the consumer. This will have a genuinely transformative effect on the so-called decoupling that he and the Liberal Democrat spokesperson have raised.

[Barry Gardiner (Brent West) (Lab)]

I congratulate my right hon. Friend on this package of measures, which will reduce energy costs. The system left by the Conservatives needed to tackle three things: transmission charges, constraint payments and marginal cost pricing, by which the price of gas drives the cost of the whole system. I therefore welcome the strategic special energy plan, which will see assets built closer to their users and lower transmission charges, which comprise more than 20% of the cost of power. I welcome the new transmission lines and storage facilities, which will reduce constraint payments. These are game changers, but 40% of the cost of power still comes from the marginal cost of gas. Can my right hon. Friend elaborate on what he said in response to the hon. Member for North West Norfolk (James Wild) and tell us whether there are any plans to decouple the wholesale price of gas from the system? That is the real game changer.

[Ed Miliband]

I will come to my hon. Friend’s earlier points in a minute, but his last point is absolutely crucial. The last Government looked at this and found it difficult to find a mechanism to do it within the system. A key thing that clean power will do is that gas will set the price much less of the time, and with ROs being phased out and CfDs coming in, that will have a dramatic effect. At the moment, the gas price covers something like more than half the generation, and that will fall to a much lower figure—I can give my hon. Friend the actual figures.

My hon. Friend’s first point about constraint payments is worth dwelling on. If we are worried about constraint payments because the network is not there, we are right to be worried. But if that is our view, we should support the building of the network infrastructure across the country. We cannot have it both ways. We cannot say that we are worried about constraint payments and the cost on consumers but that we cannot have the new infrastructure built. That is an issue and it is a choice— I would not call it a dilemma, exactly—that every Member across the House has to make.