PA mediaLiberal Democrats have supported a plan for domestic energy bills by changing how new Akshaya projects are paid.
This plan “Pot Zero” by researchers will see more use of contracts where ministers interact with renewable firms on a guaranteed price.
Leader Sir Ed Devi said that proposals can help break the link between electricity and wholesale gas prices, reducing bills by 2035 in combination with other policies.
Energy Secretary Ed Milliband has already started a switchover process, but Lib Dames all want to see it quick to include the renewable energy generator.
Sir Ed led the contracts for the Difference (CFD) when he was the Energy Secretary in the Conservative-Lib Dem alliance government to come to power in 2010.
CFDs work by guaranteeing a fixed price for electricity – known as a strike price – that the generator receives a per unit of power generation, in the hope of encouraging private companies to invest in new projects.
If electricity prices are above the price set, companies pay extra to energy suppliers, which helps in cutting bills. If the prices fall below the guaranteed price then the energy supplier – and the customer – pay the difference to the company.
About 15% of the UK’s renewable energy generator currently is currently on CFD contracts since its introduction in 2012.
The remaining 85% are on the renewable obligation certificate (ROC), which bind electricity to gas prices, and then add a subsidy to the top.
Lib Dames are supporting a plan from researchers UK Energy Research Center (UKERC) under which existing renewable schemes can enter the “pot zero” auction for fixed price contracts.
‘Manifestly inappropriate’
Speaking at the Institute for Public Policy Research (IPPR) event, the LIB DM leader said that the system needs improvement as “97% of the time in 2021, the cost of electricity was determined by the cost of gas”.
He said: “This means that we are all paying the price of high gas in our bills, even if most of the energy we are using comes from very cheap, renewable sources.
“Not only this is clearly inappropriate, but it is also reducing public support for investment we need in renewable power.
“Therefore we have got to break the link between gas prices and the cost of electricity.”
The party argues that by 2035, this and other policies can knock with a typical domestic energy bill of £ 1,720 by about 850 pounds:
- UKERC “Pot Zero” scheme is £ 200 per year, assuming that it saves around £ 15bn
- According to the Climate Change Think Tank, from the current plan of the government for 20 years, increasing the life of CFDs by 25 years £ 30 per year E3G
- According to 2035, due to the reduction of £ 250 in bills for average domestic with gas boilers Climate change committee Seventh carbon budget
- £ 180 per year by improving energy efficiency
- According to the use of consumer savings of about 200 pounds per year with more flexible energy use, according to, according to Cornwall Insights
- UK-EU cooperation will allow more efficient power trade and reduce wholesale prices, according to Energy UKSavings of an average average £ 10 annually
Responding, Miliband said that it was already in the heart of the labor approach to achieve better results for consumers, and switching on CFD was already running.
The government has agreed to expand the number of clean energy projects bidding for contracts at competitive prices from next month.
Miliband said: “We need to go ahead and faster to create a clean energy superpower to Britain, eliminate our dependence on unstable global gas prices, and we control working people, which we control.
“These reforms will give the developers necessary certainty to build in the UK, help distributing more clean power projects and supporting thousands of jobs – to bring all parts of the mission down for good through us Plan for change,
He said that this step will help his department to keep the UK on track to produce at least 95% of its power from clean sources by 2030.
