Diesel subsidy will push up household bills - Amber Rudd

Posted On: 
7th January 2016

Family energy bills could rise by nearly £10 because of subsidies to highly polluting diesel generators needed to make sure the lights are kept on, Amber Rudd has admitted.

It was announced last month that some £175m will be handed out to companies proposing to build diesel engines to secure energy capacity in 2019-20.

But after repeatedly insisting the Government intends to “put as little pressure as possible onto hard-pressed households”, the Energy Secretary today admitted bills would rise by “a few pounds” as a result of the subsidies.

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“It is a few pounds, it will be under £10, and we will ensure that energy security is never going to be questioned under the Government,” she told the Commons during Energy Questions.

She added: “Diesel will form a part of the future but only in very small amounts. Let us remember, it is there as a backup and [will] be switched on occasionally when it is needed.”

Shadow Energy Secretary Lisa Nandy said it was “astonishing” Ms Rudd was unable to put a clearer figure on the expected rise to bills.

But Ms Rudd hit back, arguing it was Ms Nandy’s “lack of understanding” that capacity was required that was “astonishing”.

She decried the last Labour Government’s “woeful under-investment” in energy infrastructure.

“We are left with the consequences of making sure that energy security is completely reliable,” Ms Rudd added.

But she refused to be drawn on whether the subsidised firms would expect to make a 20% return on the taxpayer handouts.

The subsidies are being awarded to firms that can offer capacity at the lowest possible price.

Dozens of small, inefficient gas generators were also awarded subsidies, bringing the total handouts to more than £250m.

'SHORT-SIGHTED'

Meanwhile, Friends of the Earth condemned the Government's "outrageous" subsidy policies.

"Subsidising polluting diesel while cutting support for renewables like wind and solar is just wrong," campaigner Alasdair Cameron told PoliticsHome.

“It’s outrageous that the Government is handing out hundreds of millions of pounds supporting diesel and old coal power stations, but has capped spending on new rooftop solar at just a fraction of that.

“Ministers must end their short-sighted support for climate-wrecking fossil fuels, and commit to building a clean, renewable energy system fit for the future.”