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Energy decisions shouldn’t take place behind closed doors

A closed door

As the Energy Bill continues its journey through Parliament, important decisions have yet to be made on energy infrastructure. Is it reasonable to expect transparency on big decisions that involve your money?

This week has seen the long-awaited return of the Energy Bill to the House of Commons. MPs have been debating the finer points of what is a very significant piece of legislation, and last night it passed the final hurdle in the House of Commons. Now it passes to the noble peers in the House of Lords.

So what does this all mean for consumers? Quite a lot, as it happens. The purpose of the Bill is to put in place a framework that will deliver billions of pounds of investment in the UK’s energy infrastructure, including new nuclear power stations. That’s all well and good, but as ever, there’s more. Consumers will be picking up the tab.

What’s a strike price?

The so-called ‘Contracts for Difference’ are a key part of the legislation; they will be the main vehicle through which this new investment is secured.

What this means is that the government and an energy generator who is building a new power station will agree what is known as a ‘strike price’. This will in effect be a price that the generator can expect to receive per kilowatt hour of electricity produced. If the price of energy in the market goes below that price, the generator will receive a top-up to the agreed level. If the price goes above, they will have to pay money back.

Pushing for more transparency

Making sense so far? Good. Clearly these strike prices are pretty important. Contracts for new nuclear power stations could run into decades, meaning that payments for energy – made by you and me – will be locked in for a very long time. We’re concerned that there isn’t enough opportunity for scrutiny in the process and we’ve been trying to remedy that.

Liberal Democrat MP Martin Horwood tabled an amendment to the Bill at this latest stage that would have put in place an independent panel of experts whose specific role is to analyse whether the contracts being negotiated are value for money. We think this is the best way to ensure we end up paying a fair price for our energy.

If the negotiations take place behind closed doors (and they are already, in fact) and only presented for ‘scrutiny’ after they’ve been signed, can we really be confident we’ve got a good deal?

Unfortunately the amendment was rejected by a margin of just over 50. But it’s not the end of the road just yet. The Bill moves on to the Lords in a couple of weeks’ time and we’ll be pressing them to introduce further amendments to ensure much greater transparency is built into this process.

richard says:
5 June 2013

This was to be expected after privatisation – We need to re-nationalise the utilities..

We are surrounded by a vast and reliable source of renewable energy in the tides. Where does this figure in the scheme of things I wonder?

I agree with Malcom R Why are we not hearing about Tidal Energy.

Siemens are investing heavily in this valuable source of energy production. What about Hayle in Cornwall ? they are producing energy why are we not hearing more about their project and expansion into other areas.

Also digesters they are not all dishing out putrid smells. We are close to one on a Farm which digests vegetation, it is less than a mile away, and we wouldnt know it is there apart from the buildings.

We have lots of sea and lots of garden waste, why cant we see action being made in these areas?

bob says:
8 June 2013

Who pays for disaster recovery?
Who pays for decommissioning?
Who pays for security?
Who pays for changes if Scotland becomes independent?

I hope the costs are transparent. If an energy supplier doesn’t pay for those costs and the taxpayer takes up responsibility, then the supplier needs to pay insurance premiums to the taxpayer.