British households could spend around £1.4bn subsidising European electricity bills in 2030 as part of Ed Miliband’s green energy push, a report has warned.
The Contracts for Difference (CfD) scheme, which was established in 2014, was said to be a way to encourage development from renewable energy firms, such as wind farms, which are essential to propping up the Energy Secretary’s ailing net zero plans.
The initiative guarantees renewable energy developers an inflation-linked minimum price or “strike price” for each megawatt hour of electricity, which provides businesses with price certainty, making them more likely to start building.
But it also means that even if the wholesale price is cheaper than the pre-agreed fixed price, British consumers must cover the full pre-negotiated bill.
A report published this week by the Centre for British Progress has warned that on windy or sunny days when Britain generates excess solar or wind energy, British households continue to pay well above the wholesale price.
The surplus is then shipped to Europe via electricity inter-connectors and sold at a discount in countries such as France, Denmark and the Netherlands, the report has claimed.
A spokesman for the Department of Energy Security and Net Zero refuted these findings, saying: “We do not recognise these figures and the claims are misleading.”
