Householders will see their energy bills rise following the Government’s decision to award £175 million in public subsidies to support diesel generators.
Energy Secretary Amber Rudd made the announcement while speaking during energy questions in the House of Commons, blaming the Labour Party for the hike.
It follows the results of DECC’s second Capacity Market auction which was revealed last month.
When questioned by Shadow Energy Secretary Lisa Nandy MP, Ms Rudd insisted subsidising the high polluting energy sources is to ensure the UK “doesn’t have any problems at all with energy security”.
She said: “What is astonishing is the Honourable Lady’s lack of understanding of the fact that the Capacity Market is needed because of Labour’s woeful underinvestment in infrastructure under their Government.
“We are left with the consequences of making sure that energy security is completely reliable. The Capacity Market is essential to ensure that hole is filled and we are proud of the way it has delivered the second auction just completed. As I said to the Honourable Lady, it is a few pounds, it will be under £10 and we will ensure that energy security is never going to be a question under this government.”
Ms Rudd also did not deny when questioned if companies will make returns of more than 20% at the expense of bill payers.
She insisted that renewable energy is an “essential part” of energy security as well as decarbonising and meeting the targets and that government isn’t undermining policies.
“What we are trying to do is get the right balance to support policies, support renewable energy while also looking after the bill payer and ensuring that not too much is added to their bills… The UK is responsible for 1% of the world’s emissions and the success of Paris was that we deal with nearly 100% of the world emissions. That is where we will get the real difference in change in terms or carbon emissions,” Ms Rudd said.
Her comments follow the government’s decision to scrap support for onshore wind and reduce subsidies for solar power.