UK Treasury to police offshore wind only where it suits consumers, even as fossil fuel projects keep moving
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Chancellor John Healey said new offshore wind subsidies will be allowed only when they can be squeezed into an already strained grid without pushing up electricity bills, while the government continues to back oil and gas projects and weighs more.
The UK Treasury announced that upcoming offshore wind projects will only receive subsidy contracts if ministers are convinced the electricity grid can absorb the power without passing extra costs on to consumers. Chancellor John Healey wrote in The Times that clean power has to be added at the right pace and in places where the grid can carry it, adding that “there’s no sense building power that can’t connect and then paying to switch it off.”
Healey said the next renewables auction will prioritize projects that lower bills and strengthen energy security, even as the government tightens the screws on clean-energy spending. He warned that “wasted wind” charges could add about £100 to household energy bills by the end of the decade, as the National Energy System Operator pays wind farms to curtail output when grid capacity is insufficient. A tracker from Octopus Energy reported more than £47 million was spent in a recent week to manage such shortfalls.
The chancellor also indicated that a new cost-control framework will be introduced in the upcoming spending review, allowing new levies on bills only where they reduce overall costs or are essential for supply security. “We’ll be hard-headed about what we build,” he said.
Energy Secretary Miatta Fahnbulleh previously noted the need to balance the net-zero transition with affordability, stating her role is to keep people “with us” by making “hard trade-offs.” At the same time, the government has also approved new oil and gas projects, including the Jackdaw field, and is reportedly considering the Rosebank oilfield.
Energy analyst Adam Bell, a former government official, suggested ministers might favor wind projects with later delivery dates or limit approvals for Scottish offshore farms where grid connections lag. Jess Ralston, head of energy at the Energy and Climate Intelligence Unit, argued that renewables can deliver both clean and low-cost power, noting that wind farms reduced wholesale electricity prices by about a third last year.