UK Treasury to veto offshore wind projects that raise consumer bills

The UK Treasury announced that upcoming offshore wind projects will only receive subsidy contracts if ministers are confident the electricity grid can accommodate the generated power without raising consumer bills. Chancellor John Healey wrote in The Times that clean power must be added at the right pace and in locations 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. 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.” 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.