Draft Renewables Obligation (Amendment) Order 2026

Pippa Heylings Excerpts

Wednesday 11th March 2026 General Committees

[Pippa Heylings (South Cambridgeshire) (LD)]

The Liberal Democrats have long called on the Government to reform and reconsider the UK’s renewables obligation contracts, which were replaced in 2017 by the contracts for difference scheme set up by the Liberal Democrats when we were in government. We all know that CfDs are a more effective and affordable way to create investment in our net zero economy, which continues to grow, and has to grow for us to be able to decouple the cost of electricity from gas. And it is growing, despite attempts from other parties to talk it down.

Adjusting the inflation indexation from RPI to CPI, and therefore reducing the buy-out price for the contracts, will reduce the costs of this outdated scheme. That is always welcome news to households across the UK. However, as the Minister said, there are valid concerns from the renewable energy sector about midway changes to investment plans, particularly if the changes are piecemeal. RenewableUK and others were broadly against the change, and voiced that repeatedly in the Government’s consultation and beyond.

The UK’s reputation as a safe and predictable place for investment in vital new renewable energy capacity has been hard won, and must be retained to keep costs as low as possible for bill payers. The way that policy changes matters. Having listened to the sector, the Liberal Democrats believe the Government are miscalculating by not going further to make wholesale changes to the renewables obligation scheme, as we have called for. By drawing out the changes, they are only adding uncertainty for investment, so I call on the Minister to seriously consider our calls to move 85% of renewables obligation contracts on to the CfD scheme, as part of a single, coherent package. That way, renewable energy projects can continue to produce the green energy that the UK desperately needs, while also ensuring that generators can benefit from a new long-term contract that is fair and equitable for generators and consumers alike.

In times like this, when we see volatile oil and gas prices soar, consumers need and deserve to feel the benefits of the lower costs of renewable energy, rather than the unintended repercussions of the Government’s multiple fragmented changes.