Here are the climate-related sections of speeches by MPs during the Commons debate Draft Contracts for Difference (Miscellaneous Amendments) Regulations 2021.
09:25 The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The draft instrument makes a number of amendments to three separate contracts for difference regulations: the Contracts for Difference (Definition of Eligible Generator) Regulations; the Electricity Market Reform (General) Regulations and the Contracts for Difference (Allocation) Regulations. The amendments will help to support the ambition for the next contracts for difference auction, planned to open in December this year, and help to make progress towards the 2050 net zero target.
The most recent allocation round in 2019 saw contracts awarded to 5.8 GW of new renewable energy projects, with the costs of offshore wind generation falling by around 30% from the previous allocation round in 2017. We are laying the amendments today to give certainty to businesses on what basis projects will be eligible to take part in the next CfD scheme in advance of the round opening in December.
The Government believe that the current policy approach needs to be strengthened to boost competitiveness and productivity in places that stand to benefit the most, harness innovation and invest in skills while driving progress towards the UK’s net zero target.
Biomass conversions have played a material role in helping to meet the UK’s 2020 renewables targets by replacing coal-fired power stations with renewable energy generation. However, as electricity generation has become less carbon intensive, we have reviewed the role of biomass conversions. The regulations remove biomass conversion projects from the list of technologies eligible to apply for a CfD in future allocation rounds.
The Government have confirmed a new ambition for 1 GW of the new 40 GW offshore wind target to come from floating offshore wind on account of widespread agreement that floating offshore wind will play an important role in helping the UK to meet its longer term decarbonisation targets. That technology is currently in an earlier phase of development making it more costly than offshore wind that is attached to the seabed. It is therefore appropriate for floating offshore wind projects to be recognised as a distinct technology within the CfD scheme, one subject to its own administrative maximum strike price. The regulations therefore establish floating offshore wind projects as a category of technology eligible to take part in the CfD scheme and to compete alongside other less established technologies. In doing so, that delivers on our manifesto commitments.
The UK’s new 2050 net zero emissions and carbon budget six targets, which we put into law yesterday, mean that we will continue to require substantial amounts of new, low-carbon power sources to be built before 2050. The changes in the regulations ensure that CfD allocation rounds can best support an increase in the pace of deployment of new renewable electricity generation needed to achieve our ambitions, while continuing to consider value for money for consumers. Subject to the will of Parliament, the arrangements will come into force on the day after the regulations are made.
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09:31 Dr Alan Whitehead (Southampton, Test) (Lab)
The Opposition do not have any problem with the biomass conversion proposal, under which CfD inclusion is ended for biomass plants that are converted from existing coal-fired power stations. This country has examples that have been successfully carried out under previous CfD arrangements, one being Drax in the east midlands. Drax is an interesting example in as much as the statement in the explanatory notes relates to the idea that although the Government are, as it were, withdrawing favours from biomass conversion as it stands, they acknowledge that the role of biomass with carbon capture and storage is a high priority for the Committee on Climate Change and is considered by it and many others as a substantial contributor to future net negative emissions. Should bioenergy with carbon capture and storage proposals be made, the Government may want to review their decision on biomass conversions. It is not an academic issue precisely because not only has Drax involved itself in biomass conversion from an existing coal- powered plant, but it is implementing a CCS programme for the biomass conversion that has taken place. Circumstances could arise in which a developer came forward with a proposal for not only biomass conversion of an existing coal-fired power station but CCS attached to it. It would therefore fall into the BECCS area in terms of future biomass arrangements. It would well behove the Government to consider that possibility early rather than later, because that is likely to be quite a considerable portion of biomass activity in the future. It would be of concern were the Government not ready to support that in the best way possible.
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09:45 Anne-Marie Trevelyan
We are trying to ensure that we build the capacity in renewable energies to help us to achieve net zero by 2050. No doubt more regulations will be introduced in due course to help us make sure that we can best support the increase in pace of renewable deployment, as well as always remembering that value for money for consumers is a critical part of delivery.
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