Starmer pledges overhaul of CfDs

Sir Keir Starmer has promised to set new rules for Contracts for Difference (CfD) auctions as part of plans for an incoming Labour government to “throw everything” at decarbonising the UK’s power system by 2030.

In a speech this morning (19 June), the opposition leader launched Labour’s “national mission” on clean energy.

Starmer said Labour would link access to public investment and subsidies, such as those on offer for low carbon energy projects via CfD auctions, to factors like job quality, wages, and access to trade unions.

He said: “We will transform the way we set the price for investors in clean energy. The Contracts for Difference auctions must deliver jobs as well as investment.

“We will set new rules – as a condition of entry – on good work, decent pay and union recognition.”

The government has recently held a call for evidence into including non-price factors, such as energy security and the development of a UK supply chain, into the criteria for awarding CfDs rather than just focusing on whoever offers the lowest bid, as happens currently.

The Labour leader’s comments also follow the publication last week of proposals by SSE to include non-price criteria into offshore wind CfDs, preferably when seabed plots are being auctioned off.

Starmer also used his speech to announce that Great British Energy, the publicly owned company that it wants to set up to kickstart investment in low carbon power projects, will be based in Scotland.

Pledging to end what he described as the current’s government “sticking plaster politics” approach, Sir Keir said: “We’re going to throw everything at this: planning reform, procurement, long-term finance, R&D, a strategic plan for skills and supply chains, a new plan for a new settlement, a clear direction across all four nations, pulling together for a simple, unifying priority. British power for British jobs.”

Labour also announced today that it would end the government’s de facto planning ban on onshore wind ban in months if it comes to power.

In addition, the plan sets out steps to reduce the length of the planning process for renewables projects from “years to months” and end the “duplication and bureaucracy” in the process for consenting offshore wind.

And Labour said that it would ensure every relevant regulator has a net zero mandate, while requiring local authorities to identify areas suitable for renewable generation.

Labour’s plans received a warm welcome across the energy sector.

RenewableUK’s chief executive Dan McGrail said: “Overall, it’s clear that delivering Labour’s renewable energy ambitions will require considerable reforms to planning, grid development, regulatory frameworks and skills policy. We need to address these issues as a matter of urgency, so welcome clarity on them. We hope Labour will continue to engage with industry going forward, establishing a partnership approach to developing solutions which will maximise the economic benefits of the energy transition for communities throughout the UK”.

Sam Richards, founder and campaign director of pro-growth campaign group Britain Remade, added: “It’s great news that Keir Starmer has put reforming our broken planning system at the heart of Labour’s plans to deliver the clean energy infrastructure that can cut our energy bills and create jobs across the country.

“But hard-pressed households shouldn’t have to wait for one of the cheapest forms of energy to be unlocked, and with it cheaper bills. At the stroke of a pen Rishi Sunak could lift the ban on new onshore wind farms.

“Britain can be a clean energy superpower with abundant cheap clean energy – but we need to get build. The Labour leader’s speech was a huge step in the right direction, but he must remain committed to getting spades in the ground straight away if he becomes the next occupant of Downing Street.”