Electricity Market Review

Wera Hobhouse Excerpts

Thursday 10th July 2025 Commons Chamber

[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.

[Wera Hobhouse (Bath) (LD)]

UK households and businesses pay almost the highest energy costs compared with other European countries. As has already been said many times, although it is worth repeating, that is because the cost of electricity is coupled to the cost of gas. I absolutely share the Secretary of State’s ambition to rapidly reduce our reliance on gas. Long, medium and short-duration storage will play a vital role in bridging the intermittency of renewables. What more can the Government do to rapidly increase support for these emerging technologies?

[Ed Miliband]

LDES, as it is known to the super-nerds—long-duration energy storage—is really important, as indeed are batteries. We now have a cap and floor mechanism for LDES. Ofgem, along with NESO, is looking at the applications that have been made, and that will now be driven forward. That is really important. What I always say to people is that we need all the elements of the system. We need nuclear—in my view—we need renewables, we need battery storage, and we also need LDES. All of them can contribute to a clean power system.