Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, what steps she is taking to ensure decommissioning bonds for energy infrastructure are adjusted to reflect inflation and other financial contexts.

Responsibility for decommissioning on land is set out in the relevant planning permissions.

There are separate legal regimes relating to the decommissioning of offshore energy infrastructure such as renewable generation and oil and gas extraction.

Under the Energy Act 2004 related Guidance, those responsible for constructing offshore renewable energy installations are responsible for covering the financial liability of decommissioning.

This includes ensuring that the estimated cost of decommissioning includes an appropriate rate for inflation over the lifetime of the project in question.

Under the Petroleum Act 1998, those responsible for extracting hydrocarbons on the UK Continental Shelf are also responsible for decommissioning the associated infrastructure. Under the Act, industry’s decommissioning programme costs are regularly reviewed. Where the Secretary of State holds financial security for oil and gas decommissioning, costs are reviewed annually to account for inflation and other cost movements.

Bonds held as security by the Secretary of State for Oil & Gas decommissioning are renewed on an annual basis and is updated for inflation.