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

To ask the Secretary of State for Business, Energy and Industrial Strategy, whether his Department has taken steps to decouple the cost of renewable energy from gas prices, including through Contracts for Difference.

Contracts for Difference are the main support mechanism for new low-carbon generation in Great Britain. They guarantee a fixed ‘strike price’ for renewable generators on the scheme, which decouples their costs from gas prices as their revenue is not impacted by wholesale market changes.

The Review of Electricity Market Arrangements is considering how the broader role of gas as a price setter for renewable energy could be reduced. This includes examining reforms that accelerate low-carbon deployment, so that gas sets the price of electricity for shorter periods, as well as wholesale market reform options that ensure lowest overall costs.