Rudd blames Labour for £175m 'diesel farm' subsidies

Energy Secretary Amber Rudd has been forced to defend her decision to allocate a new subsidy to back-up 'diesel farms' in Parliament today (7 January).

Energy Secretary Amber Rudd confirmed details of the £175m subsidy for diesel generators in December

Energy Secretary Amber Rudd confirmed details of the £175m subsidy for diesel generators in December

The £175m funding, announced last month, is part of the capacity market scheme which provides payments to power plants to keep them on standby in case of power shortages.

In this afternoon's Energy Questions session in the House of Commons, Rudd was grilled on the policy by shadow energy secretary Lisa Nandy.

Nandy said: "Last month, the Secretary of State agreed to hand out hundreds of millions of pounds in new public subsidies to diesel and coal power generators through her capacity market scheme.

"Can you tell the House how much family energy bills will rise as a consequence?"

Rudd responded by claiming that the capacity scheme is in fact needed "because of Labour's woeful underinvestment in energy infrastructure during their Government," adding that energy security is a "non-negotiable priority" for the Conservative Government.

When pressed by Nandy on exactly how much the subsidies would add to household energy bills, Rudd replied: “It is a few pounds - it will be under £10”.

'Just wrong'

The exchange also stoked the ire of green campaign group Friends of the Earth who called the subsidy award "outrageous".

Friends of the Earth energy campaigner Alasdair Cameron said: “Subsidising polluting diesel while cutting support for renewables like wind and solar is just wrong."

In the same Parliamentary session, Energy Minister Andrea Leadsom was asked how she expected the cuts to the Feed-in Tariff (FiT) to affect the sector. The Government’s own analysis has suggested that the 64% cuts in some tariffs could lead to job losses in the solar industry of between 9,700 and 18,700.

Leadsom said: “The new tariffs aim to give generators with well-sited projects ‘appropriate’ rates of return, so around 5% for solar. We believe this will, by 2021, save £280M to £340m for bill payers while enabling 220,000 new installations to be subsidised under the new FiT.”

The cuts to the FiT scheme, set to kick in on 8 February, are facing some resistance however, as Lib Dem peer and former coalition minister Lynne Featherstone tabled a motion in the House of Lords to repeal the amendments.

The motion is set to go before the Lords on 26 January.

Brad Allen


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