UK has spent £12.5bn from energy bills to fossil fuel power plants in past decade
UK has spent £12.5bn from energy bills to fossil fuel power plants in past decade
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Research finds 60% of government contracts through backup ‘capacity market’ went to fossil fuel plants. The UK has given more than £12.5bn from energy bills to fossil fuel power plants in the past decade through a government scheme to keep the lights on during winter, according to new analysis.
The research found that, since 2015, the government has offered contracts worth £20bn through a “capacity market” to create a backup reserve of generators on standby, of which about 60% were fossil fuel power plants and a quarter were energy storage and power cable projects.
This has included 90 gas power plants, which each clinched a contract of up to 15 years backed by a levy on consumers’ energy bills. It could mean households will still be paying for gas plants in 2040, a decade after the government has promised to eliminate 95% of fossil fuels from the UK’s electricity system.
The report, by analysts at Aurora Energy Research, was published weeks after the Guardian revealed that the power grid operator was forced to use a separate scheme to pay almost £18m to two gas power plants in a single day to safeguard Britain’s electricity supplies when high demand for electricity combined with low wind speeds.
An annual capacity market auction sets a subsidy price to pay owners of power generators – including gas, hydroelectric, wind and solar projects – to cover the cost of meeting electricity demand. The UK offered the highest gas power payments in Europe, according to the report, which was commissioned by Beyond Fossil Fuels and found that in total almost €53bn (£45bn) has been granted to fossil fuel plants through Europe’s capacity markets since 2015.
