Over the past decade, the UK government has allocated over £12.5 billion from consumer energy bills to support fossil fuel power stations as part of a winter contingency plan, an investigation reveals.
The study indicates that since 2015, the government has provided £20 billion in contracts through a “capacity market” scheme, designed to maintain a reserve of standby generators, with approximately 60% awarded to fossil fuel plants and a quarter to energy storage and power cable initiatives.
According to the research by Aurora Energy Research, published shortly after a report by the Guardian on emergency payments to gas power plants, 90 gas-fired plants have secured long-term contracts, potentially extending charges to household energy bills until 2040.
This extension comes despite the UK’s commitment to reduce fossil fuels in electricity generation by 95% by 2030.
The capacity market auctions, held annually, determine subsidy rates to support various power generators, including gas, hydroelectric, wind, and solar, to ensure electricity supply meets demand.
The UK, having offered the highest subsidies to gas power in Europe, has seen nearly €53 billion funnelled to fossil fuel plants across European capacity markets since 2015.
Italy and Poland have also made substantial allocations to fossil fuels within their capacity markets, with Italy granting €15 billion to gas plants and Poland awarding a significant portion to coal-fired generators.
Juliet Philips of Beyond Fossil Fuels criticizes the continued reliance on gas, linking it to the energy crisis and urging an end to fossil fuel subsidies in favour of more sustainable and stabilizing energy solutions.
The ongoing need for gas power backup during low wind and solar output is predicted to drive up costs as the UK leans more on renewables.
Campaigners advocate for an alternative approach to manage backup gas power, aiming to prevent inflated pricing during tight supply conditions.
Meanwhile, a government spokesperson asserts that the capacity market ensures reliable electricity supply and is under review to encourage gas plant decarbonization, aligning with the UK’s 2030 clean power goal.
